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The Actuary The magazine of the Institute & Faculty of Actuaries

Longevity launch expands pension scheme options

Pension Corporation, which was set up by the former Duke Street Capital boss, Edmund Truell, has launched an insurance offering for defined benefit pension schemes.

The product was designed to cover the costs of acceleration in mortality improvements beyond a scheme’s expectations in return for fixed annual premiums. The insurance-based offering, which under Financial Services Authority rules is not a derivative, is written on a scheme-specific basis without reference to any population-based mortality index.

Pension Corporation believes it will be an attractive product to large pension schemes for which the buyout option would be unaffordable. The product is the latest addition to the longevity risk management bestiary, which up to now has included JPMorgan’s longevity swap and Pensions First’s investment-based solution.