The watchdog overseeing U.K. retirement plans is conducting new analysis and reviewing information it already has from previous work with pension funds in efforts to build on its understanding of the liability-driven investment landscape.

Charles Counsell, CEO at The Pensions Regulator, wrote in a letter to the government’s Work and Pensions Committee on Wednesday that the regulator’s investment consultants and actuaries are conducting the new analysis, which includes requesting data from a number of pension funds. The supervision team is reviewing previously gathered information “to help clarify the picture we have.”

TPR will also issue a regulatory guidance statement to trustees to update its expectations regarding LDI.

The letter was written in response to a request from the Work and Pensions Committee to answer 12 questions on the impact of falling bond prices and surging gilt yields on pension funds. Plummeting prices led to large collateral calls on derivatives used in LDI programs for some pension funds.

Mr. Counsell wrote that “it is not the case” that pension funds were at risk of collapse due to the rapid movements in gilt prices. He added that the value of liabilities has fallen by up to 50% depending on a pension fund’s circumstances, due to the rise in gilt yields.

TPR has also met with the Pensions and Lifetime Savings Association and the Association of Professional Pension Trustees to discuss experiences and their members’ plans.

Among its answers to the committee’s questions, TPR said the problem that pension funds with LDI portfolios faced “was primarily an issue about short-term pressure on liquidity,” rather than a funding problem. It noted that LDI portfolios, while providing downside protection in the event of falling yields, does require the posting of collateral when yields rise, which “requires planning on the part of trustees to ensure that they have liquidity available to match these calls. The risk of long-term gilt yields rising and the consequent need to post capital was well understood by the industry and dealt with through liquidity plans. It is the speed and the magnitude at which gilt yields increased at the end of September that caused the squeeze on liquidity,” TPR wrote. Had the increase in yields happened over a longer period of time, the same challenges would not have hit pension funds, it said.

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