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The Actuary The magazine of the Institute & Faculty of Actuaries

DB schemes wasting money on LDI, says Keating

Speaking at a meeting of The-Pensions-Net-Work in a talk centred around his new paper 'Don't stop believing', Mr Keating proposed that the only liability for schemes to worry about was the likelihood of the scheme sponsor becoming insolvent, and since that could easily be insured, there was simply no need for expensive liability matching.

The issues associated with increasing longevity were a recurring theme among the speakers at the meeting.

The International Longevity Centre's David Sinclair gave an insight into the likely impact half a million prospective centenarians by 2060 and other speakers also made reference to the increasing longevity in their talks, which covered a wide range of subjects.

Andy Cheseldine of Lane Clark & Peacock also mentioned the increasing impact for members of DC schemes in his talk, which looked at the way in which retirement products will be distributed in a consultancy charging world. And the Ideas Lab's Robert Reid in his talk 'Simples - compare the pensions market' stressed the need for much better education of the population on the consequences of living longer.

John Moret, chair of The-Pensions-Net-Work, said: "I found it fascinating that in such a wide range of talks, covering so many areas of the pensions marketplace, the issues associated with increasing longevity were seen as so significant by so many of our expert speakers. It was a wake-up call for our industry and for government and it once again highlighted that this issue is not going to go away. It poses enormous challenges, not just for the pensions industry but for society as a whole. The time bomb is ticking and the need for greater awareness, education and importantly action is clear. I am sure it will be a subject that we will return to in future meetings."

Meeting attendees also included Steve Mingle of Isinglass Consulting and Chris O'Brien from Nottingham University Business School.