Pension Plan

The UK is leading the world when it comes to hedging the longevity risk contained in many defined benefit pension plans. In a $3 billion deal, Rothesay Life will be assuming the longevity-related liabilities of 55 percent of the plan participants of the RSA Insurance Group pension plan. Goldman Sachs is the parent company of Rothesay Life. Liability swaps such as this are poised to gain traction in the UK, but are essentially non-existent in the United States since certain legal aspects of the...

There is a good article on the use of immediate annuities by Walter Updegrave who is a senior editor at Money Magazine. The article discusses how to think about an immediate annuity in light of other guaranteed payments from Social Security or a pension plan. Laddering of annuity purchases is discussed. Age and timing of an annuity purchase is addressed, as is the concept of the mortality yield or mortality credit . Source: Money Magazine Full Story