Working out how to de-risk by purchasing a bulk annuity is one of the most important decisions a pension scheme trustee is likely to make. John Baines, Partner in Aon’s Risk Settlement Group, talks about the benefits of a bulk annuity and the lessons learnt by other pension schemes that have completed buy-ins in recent years
Emerging deaths data a change in the pace of improvements in life expectancy. Higher than expected deaths in early 2015 was first considered a blip (initially attributed to an ineffective flu vaccine), however the latest data continues to support the theory that there is a slowdown in longevity improvements. Whilst this has one implication for scheme funding, it also potentially sets a different benchmark for assessing the value of longevity settlement transactions. Watch our video of Tim Gordon and Martin Bird explaining the issues.
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Longevity risk is gaining increased attention from trustees and pension managers looking to mitigate the overall risk profile of their pension schemes. Often seen as an unrewarded risk, hedging the exposure to potential increases in longevity is fast becoming a key priority for most pension scheme stakeholders. Michael Walker of Aon’s Risk Settlement Group explains what options are available to schemes looking to manage their longevity risk.
The longevity swap market has evolved considerably since the first deal was completed almost a decade ago. With increased structural options available in the market, pensions schemes looking to hedge longevity risk need to think carefully about the structure that is right for them. Hannah Cook, a longevity swap specialist in Aon’s Risk Settlement Group, discusses the various structures available and highlights the key points to consider when putting in place a longevity swap.
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