Facing a budget deficit of £10.2 billion in the funding for its pension plan, the venerable Royal Mail Group in the United Kingdom turned to an unorothodox strategy. Using equity derivatives that paid out when stock markets rose, the Royal Mail Pension Plan managed to earn 29 percent on its money, reported the Wall Street Journal on Tuesday.

As the credit crunch hammered stock markets and many higher-yielding bonds, pension funds around the world faced steep losses. Royal Mail, the U.K.’s publicly owned postal service, found itself drastically underfunded.

Using derivatives for risk management and investment, the pension fund managed to shrink that gap, reports the WSJ; it’s now 76 percent funded.

The fund also put a great deal of its money into global investment-grade bonds – not surprising, given the recent rally in fixed-income investments.

The news should cheer derivatives traders and brokers, who may sometimes feel themselves the target of public scorn for the role the financial instruments played in the credit crisis. Derivatives represent a vital and necessary balancing force in the global financial system, and with proper derivatives risk management strategies, they can pay off – as they did for the Royal Mail.