In our paper, we present a case study to illustrate the scale of the potential impact of rising life expectancy, showing how a DB scheme might need to increase its investment risk exposure materially to then stay on track for its endgame target.
By comparison, using a longevity hedge can smooth a scheme’s path to the endgame, even if you account for the cost of the hedge over time.
The impact of longevity risk could be significant for DB schemes, whether you are running on, or planning to buy out within the next five to 10 years.
Focus on longevity risk
