Club Vita has welcomed reports that Royal County of Berkshire Pension Fund could be the first local authority scheme to hedge longevity risk:

Nick Flint, Chief Executive of Club Vita, the longevity analytics service said: “Local authorities are acutely aware of the impact of longevity on society, not least in the provision of local services such as social care for the elderly.  The Berkshire pension fund’s pioneering move into longevity swaps, a form of insurance against increasing longevity is a bold one, which others should consider, at the right price.  Evidence of how pension funds are being affected by increasing life expectancy is growing and Club Vita’s ground-breaking research reveals a complex patchwork quilt of varied lengths of lives for different types of people across the shires.  Only time will tell whether the people of Berkshire have paid too much in the pursuit of the financial certainty that all yearn for.”

To date, over 100 occupational pension schemes have collaborated in Club Vita’s research helping to address the perennial issue of uncertainty in life expectancy assumptions; uncertainties which can cost schemes and their sponsors millions of pounds each year. A comprehensive understanding of the unique longevity characteristics of the scheme is the foundation for considering solutions to reduce exposure to demographic risks.