New Derivatives Market Taking Shape with Longevity Swaps
Corporate pension plans face the real risk of having their plan participants live longer than what is projected by actuaries. In other words, similar to an individual who considers an annuity to offset the risk of outliving their assets in retirement, pension plans must deal with longevity risk . A new derivatives market is evolving to deal with longevity risk on an institutional scale. Many of the deals thus far have been between investment banks such as JP Morgan and insurance companies that...
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