A total of 60% of companies are looking to hedge longevity risks within their pension schemes, according to research from management consultancy Watson Wyatt.
The survey of 70 senior finance, treasury and pensions executives from companies with defined benefit (DB) pension schemes shows 25% have taken steps to control longevity risk through methods including mortality risk transfer products and mortality sharing benefit design. A quarter have considered hedging and 8% intend to hedge or buy-out. Steven Dicker, a senior consultant in Watson Wyatt's corporate consulting group, says: "Unanticipated increases in life expectancy can represent a significant un-hedged risk for pension schemes. We are finding that longevity is increasingly being looke...
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