Investment implications
- Pensions need to assess longevity risks and adjust their portfolios for different scenarios.
- Pensions will need to implement a robust framework to accurately measure and analyze the implications of longevity risk on plan outcomes, including stress testing longevity improvement scenarios.
- Pensions should assess the toolbox of investment and protection actions that can mitigate the impact of longevity risk, adjusting the allocation to growth assets and duration accordingly (e.g., reinsuring longevity risk).
- Pensions may want to evaluate the desirability, potential timing, and likely costs of risk-transfer actions given the impact of longevity risk on plan liabilities and corporate balance sheet volatility.
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MT 360
References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities.
The securities referenced may or may not be held in the portfolio at the time of publication and, if such securities are held, no representation is being made that such securities will continue to be held.
