Wednesday, July 23, 2008
Swiss management of longevity
Influential Swiss newspaper NZZ has a good article (in German) about how Swiss Pensionskassen manage their longevity risks, i.e. not very much. The article claims that due to the usage of backward looking mortality tables, the longevity of members is systematically underestimated in a world of continuously rising longevity. Unfortunately the article does not take into consideration the experience in more advanced countries such as the UK. This is a valid issue which receives too little attention because of a rigid regulatory environment in Switzerland where many important parameters are politically determined with little consideration to factual developments.