EUROPE - The growth in occupational pension funds will accelerate in the coming decades due to governments "shirking" responsibility for pension risks.
This statement was made in a report by the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS), which added: “The ongoing disengagement of governments in funding public pensions is leading to a growing share of savings for retirement being invested in pension plans,” the report said. "This will lead to occupational pension funds having to bear the longevity risk previously borne by the public sector."
In order to hedge this increased exposure, pension funds could look to increase their equity allocation in sectors that benefitted from the economic consequences of aging, the report proposed.
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