3904570: After-Work Lecture: Challenges pension funds face due to low interest rates

Beschreibung

For any pension scheme, the purpose of investing is to fund future benefits. The continuous decline of interest rates represents a huge challenge and pension funds are struggling to find ways to ensure financing of future benefits.
Finding an answer requires a thorough understanding of the characteristics of pension liabilities, assets and the interdependence of the two over time. Apart from longevity or mortality risk, pension funds predominantly have to cope with investment risks. This can be offset in two different ways – either by taking advantage of existing risk capital or by adjusting future contributions and benefits.
We discuss expected investment return, appropriate levels of investment risk and the impact on risk bearers.