Governments and the Market for Longevity-Indexed Bonds

Pablo Antolin () and Hans Blommestein

No 4, OECD Working Papers on Insurance and Private Pensions from OECD, Directorate for Financial and Enterprise Affairs

Abstract: Uncertainty about length of life, longevity risk, is a growing financial problem for pension funds and annuity providers. They would like to transfer longevity risk away to institutions better placed to deal with it. Unfortunately, there is a lack of financial instruments to hedge against this longevity risk, thereby complicating risk management by pension funds and hindering the expansion of the annuity market. Consequently, this paper examines the role of government in...

Le gouvernement et le marché pour les titres indexés sur la longévité
L'incertitude sur la durée de vie, le risque de longévité, est un problème financier croissant pour les fonds de pension et les fournisseurs de rentes viagères. Ils préfèrent transférer ce risque aux institutions les plus préparées pour les absorber. Malheureusement, il y a un manque d'instruments financiers afin d'avoir une couverture contre le risque de longévité. Cette situation complique le management du risque et empêche l’expansion du marché de la rente viagère. Par conséquent, ce document étudie le rôle...

Keywords: Annuities; DB and DC plans; financial instruments; hedging; indices; longevity index; longevity risk; longevity-indexed bonds; pension fund; Uncertainty; fonds de pension; incertitude; index de longévité; index; instruments financiers; plans de pension de prestation définie et contributive; rente; risque de longévité; titres indexés à la longévité; viager (search for similar items in EconPapers)
JEL-codes: C15 C32 D8 G23 G28 J11 J26 (search for similar items in EconPapers)
Date: 2007-01
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