Pension schemes look to hedge longevity risks

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 look...