I have a dilemma. In late 2009 we bought a new house in the Mourne Mountains with a wood pellet boiler with the promise of low heating bills and endless hot water. Prior to this I had lived almost a half century without knowing what an auger is and with fuel either on tap or at worst at the end of a phone. With 14 days lead in time turning to 21 in snow and efficiency only achieved with much cleaning and maintenance, it is clear that the unhedged downside risks of wood pellets are too painful to contemplate on an ongoing basis (such as returning home to a cold house after a weekend away). It just struck me how similar the options are to those facing pension scheme trustees. Replacing the wood pellet boiler means “fire and forget” like buy-out or full matching. Seems like an expensive option on the face of it but little or no maintenance. Or Trust in wood pellets to deliver returns without too bumpy a ride (equities): high maintenance but with the promise of low costs in the long run. You can even have an automated GSM text sent to tell you when the boiler has failed (any chance of including this in a fiduciary management mandate)? Or Hedge my bets. Go for the benefits of wood pellets but buy an oil boiler as back-up – bit like LDI. Still got the maintenance and the potential upside but the maintenance cost is steep. My logical head says oil but one can become strangely attached to a wood pellet boiler. Nice piece of technology that you can understand. Wood pellets go in one end and a hot bath at the other. A bit like many companies are attached to the idea of running a pension scheme and investing in risky investments even when the maths is against them and the risks just aren’t worth taking. There is of course also the ethical aspect, the long term impact on climate change and the smug “carbon neutral” boast but that is another subject in itself. Brian Spence is a founder of actuaries Spence & Partners Limited and a director of independent trustee Dalriada Trustees Limited. You can follow him at @briandspence or @PensionsEndgame on Twitter or link to him on LinkedIn. Follow @SpencePartners and @DalriadaTrustee on Twitter.