Pension funds on both sides of the Atlantic face growing problems of falling asset values and rising deficits but they are tackling the issues in different ways, says Carl Hess, global head of investment consulting at Watson Wyatt.

Funds in the UK have focused more on liability-driven investment strategies to meet their obligations than their US counterparts, he says. "LDI is more advanced in the UK than in the US, where few funds have moved to significant derisking. Almost everyone [in the US] is still on the return-seeking game."