Interest rates that are used by some UK and other foreign financial markets are changing

LIBOR (the London Interbank Offered Rate) and other IBORs (Interbank Offered Rates) are being replaced by alternative interest rates. Because LIBOR and other IBORs are market standards that are used very widely, there will be some impacts to the funds available through our Workplace DC Pension products.

How does this impact you?

Funds impacted by these changes use these rates for performance benchmarking purposes and therefore we need to update those benchmarks to reflect the alternate rates. Replacing a fund’s performance benchmark does not alter the investment strategy or materially impact the management of the fund.

We will be updating fund factsheets to reflect changes to benchmarks as they take effect. To find out if these changes impact the funds you invest in, you can view your investments by logging onto Manage Your Account and reference your fund factsheets for further information.

This notice is for information only. You do not need to take any action.

What are LIBOR and IBORs?

LIBOR and the other IBORs are the interest rates charged by banks when lending money to each other. The rates are calculated based on quotes provided by a panel of banks for several major currencies, and have been commonly used in financial markets since the 1980s. Many financial assets and instruments reference LIBOR or another IBOR rate as their benchmark, for instance to determine interest payments, and for types of bonds where the value of the asset or the cashflow it generates are specifically linked to a particular IBOR.

What’s changing and why?

Over the past decade, financial markets and industry regulators have challenged the continued reliability and appropriateness of LIBOR and IBORs. These are now being replaced with alternative “risk-free benchmark” rates, supported by liquid and observable markets.

As a result, LIBOR and other IBORs will soon stop being published and financial markets and participants currently referencing these are required to adopt alternative replacement rates. The replacement rates are similar but calculated differently and are already used by many assets and instruments.

To support this, we need to make changes to the benchmarks and objectives of impacted funds and as well as corporate actions for externally managed investments.

When do these changes take effect?

The Sterling, Euro, Swiss franc and Japanese yen IBOR, and the 1-week and 2-month US dollar IBOR, will stop being published in December 2021. The remaining US dollar IBOR will stop being published in June 2023.

LGIM’s transition activities were completed in September 2021. Activities of externally managed funds are expected to be completed between November and December 2021.

New Rates

Importantly the new rates are based on actual concluded transactions (backwards looking) and reflect the average of the interest rates that banks pay when borrowing overnight from other financial institutions or institutional investors. These differ from LIBOR and IBORs as these are forward looking, and so reflect the average expected rate.

Need more info?

You can access up-to-date information on our Workplace funds though our Fund Centre or for more details on changes to LIBOR visit

Alternatively, you can call our member helpline on 0345 070 8686, between 9.00am and 5.00pm Monday to Friday. Call charges will vary. We may record and monitor calls.