Pension funds joins longevity club
07 September 2010The Pension Protection Fund (PPF) is set to become the newest member of Club Vita - which offers longevity services to occupational pension schemes.
According to Club Vita, longevity is the most significant unmanaged risk for pension schemes, while failure to manage it properly could severely hit the financial health of sponsoring organisations.
The PPF revealed that it planned to fund a margin to cover longevity risks as part of its recent funding strategy.
Club Vita's analysis will aid assessments of the size and changing nature of this risk in the future.
According to Nick Flint, chief executive of Club Vita, the variety of schemes and scheme members within the PPF make understanding longevity a unique issue.
Martin Clarke, executive director for financial risk at the PPF, added: "Longevity risk is a significant challenge for the PPF.
"Accurate measurement of this risk is paramount to an effective control environment. The annual monitoring Club Vita provides - covering both our members' experience and that of Club Vita's wider subscriber base - will therefore form an important part of the toolkit we use to monitor longevity risks."
Copyright Press Association 2010
