Decisions Supplement - Longevity Swaps Primer

Limping along like a sick dog, defined benefit pension schemes have truly suffered over the past few years. And that poorly pooch is set to see its health worsen. The question for many companies and their pension schemes is whether to nurse a terminal situation or put the scheme to sleep? Or, as we examine here, look into alternative routes to offering a pension plan to their employees that does not drag the business into a financial black hole.

What should make FDs sit up and pay attention is the blooming of the longevity risk swaps market which, after a slow take up, is set to shift up a gear in 2010.

There is now demand for pension schemes to offload their risks and, indeed, banks and insurance houses have been lining up over to offer their services and play their part in educating FDs and trustees on the workings of longevity swaps.

In this, our latest Decisions supplement, we’ve got a special section dedicated to longevity swaps in association with Hewitt Associates. In addition, Anthony Harrington examines alternatives for both very high and very low earners. And after the child tax credits fiasco, Catherine Chetwynd looks at where employee benefits for working parents might go in 2010.

Download a PDF version of the full supplement