Longevity

Longevity risk has existed as an asset class for quite some time but has primarily been the focus of larger institutions. In a recent Financial Times article, the author discusses the recent proliferation of longevity and mortality related investment products. The range of product options include: Life settlements, blocks of annuities, reverse mortgages and life tenancies. Longevity/Mortality swaps. Structured notes, including pass-through, principal protected notes, coupon protected notes and...

Although mentioned previously , it is worth noting again that Moshe Milevsky is the most active, creative and interesting voice in the asset decumulation industry. Moshe produces copious amounts of outstanding materials that shed light on the world of annuities for both professional and consumer audiences. A recent interview in The Journal of Financial Planning is highly recommended. Moshe is working on a soon to be released book on lifecycle investing . In the Journal of Financial Planning...

A survey of UK-based pension plan sponsors indicates that 40 percent expect longevity derivatives --such as longevity swaps--to play a strong role in mitigating longevity risk . UK defined benefit pension plan sponsors are seeking solutions that will allow them to off-load the risk that their pension plan participants live longer than expected. Use of derivatives to address longevity risk and other pension funding related issues serves as an alternative to other solutions such as a full pension...

The UK-based firm PensionFirst is shifting its focus from providing investment products such as longevity bonds to the risk measurement software that has been developed over the past several years. The company will provide risk measurement and analytic services to companies that sponsore defined benefit pension plans. Many of these companies or plan sponsors are interested in removing longevity risk from their pension plans. The software developed by PensionFirst is able to deliver an actuarial...

U.S. News & World Report featured a review of five free retirement planning tools that can be found online. The review includes retirement planning software from: AARP Fidelity MetLife T. Rowe Price The U.S. Department of Labor The general conclusion is that the tools do "an inconsitent and poor job," often ignoring critical factors such as longevity risk , inflation and medical expenses. Source: U.S. News & World Report Full Story