The giant UK insurer Legal & General (L&G) reared its head on Friday to reveal the damage it took during September’s pension fund storm: a measly $12 million, a LDI (Liability Driven Investment) pension fallout, as it turns out.

Legal & General said it faces a £12 million hit to pension revenues and profits amid a sell-off in the face of chaos in the UK pensions market.

L&G had a starring role in Kwasi Kwarteng’s post-mini-budget, when banks confirmed a near collapse of pension funds amid an ‘unprecedented’ meltdown in UK government bond markets, so L&G taking a tiny £10 million ($12 million) hit to profit – one-tenth of one percent of the firm’s 2021 sales – is a pretty small price to pay. The central bank said pension funds with more than £1tn invested in them came under ‘severe strain’ with a large number in danger of going bust.

The pension industry was caught with its pants down back in September, and while the Bank of England was right on hand to hoist them back up again, the deficiencies revealed by the slip haven’t disappeared. See, the reason the crisis got so bad is because pension funds were pursuing risky, debt-funded investment strategies. And if they’re forced to borrow less in the future, they could come up short when it’s time to pay out to retirees. That’d be bad news for the firms that sponsor the pension funds: they’re the ones on the hook for any shortfalls that crop up down the line.

If there’s another key takeaway from the pension-fund soap opera, it’s this: crises often come from left of field, but they’re almost never as bad as the sudden shock makes them seem. Remember, some doomsayers claimed that the global financial crisis could spell the end of capitalism, and others reckoned air travel and concerts were done for when Covid hit. When crisis strikes, then, the optimists are normally closer to the truth than the worrywarts.