GLOBAL - A conclusive majority of some of the world's largest pension funds would not accept a standardised measure of longevity, exclusive research by Global Pensions has revealed.
Some 64% of the Global Pensions 100 Panel voted no when asked whether they would be prepared to accept the use of indices constructed around broad population cohorts in the new crop of “mortality derivatives” being developed in the UK.
Mortality derivatives are instruments that would enable pension funds to hedge the longevity risk out of their portfolfio.
BNP Paribas recently announced it had developed a number of indices which it believed could “easily” be used as the standard index for “mortality derivatives”, and Deutsche Bank and JPMorgan Chase in the UK are also developing such products.
Only 36% of the pension funds surveyed by Global Pensions said they would accept a standardised measure of longevity.
Commenting on the results, David Blake, director of the Pensions Institute at Cass Business School said: “I am delighted to hear that 64% of respondents said they wouldn’t be prepared to accept a standardised measure of longevity.
“It is such a diversity of view that will help to create a market in longevity risk transference, with some participants believing that longevity will continue to improve significantly, while others believe the opposite. There would be no market if everyone took the same view.”
The Pensions Regulator (TPR) and Labour MP Stephen Kinnock and will listen to the experiences of steelworkers when transferring their pensions away from the British Steel Pension Scheme (BSPS) next week in Port Talbot.
Just Group has acquired a 75% stake in the holding company of Corinthian Pension Consulting in a bid to strengthen its professional defined benefit (DB) advisory services.
The Pensions Regulator (TPR) has exercised its production order power under the Proceeds of Crime Act 2002 for the very first time as part of a fraud investigation.
The ITN Limited Pension Scheme has named Trafalgar House as its administrator for an initial term of five years.