The PBGC is hosting an invitation-only conference on managing longevity risk.
Guy Coughlan, global head of pension asset liability management at JPMorgan Chase Bank NA, London, will be the featured speaker at the Jan. 12 conference. It will be held at the Washington headquarters of the Pension Benefit Guaranty Corp., said Charles E.F. Millard, PBGC director.
Jeffrey Speicher, PBGC spokesman, said the meeting is intended to stimulate a high-level intellectual round-table discussion for the education of PBGC officials, pension actuaries, academics “and other thought leaders on pension risk” that are being invited.
Mr. Millard said he wanted the agency to host a series of quarterly meetings on longevity risk because retirees are living longer, spurring an increase in payouts for pension plans and the PBGC.
“Of course, we wish them (longer-living retirees) well and hope they live a long time,” Mr. Millard said. “But at the same time, I think it would be responsible for PBGC to understand all current and cutting-edge thinking on managing longevity risks.”
Mr. Millard said financial firms are coming up with a variety of models for managing longevity risks. “But many of these ideas will only become robust enough for PBGC to use them if they are adopted throughout the industry,” Mr. Millard said.
Mr. Coughlan said the firm already has served as the counterparty in several U.K. deals that transferred pension longevity risk to third-party investors in return for a risk premium.“(The ultimate goal) is to complement insurance capacity to make sure longevity risk gets transferred to organizations who can best manage it,” Mr. Coughlan said.
Added Mr. Millard, “Anybody who runs a pension stays up nights worrying about longevity risk."