Pensions and Retirement Training Course on Longevity Swaps and Risk Transfer
Master Pensions Retirement Training with expert training. 10 Days course with certification. Comprehensive training program. Online & in-person. Enroll now!
Pensions And Retirement Courses10 DaysCertificate Included
Duration
10 Days
Mode
Online & Physical
Certificate
Included
Language
English
Course Overview
This course provides participants with comprehensive knowledge of longevity swaps and pension risk transfer solutions. It covers the actuarial, financial, and regulatory aspects of mitigating longevity risk, including structuring, pricing, and implementing longevity swaps, buyouts, and other risk transfer strategies for pension funds.
Secure enrollment • Professional certificate included
Learning Objectives
By the end of the course, participants will be able to:
Understand the nature and implications of longevity risk on pension plans.
Evaluate various risk transfer mechanisms, including longevity swaps, buy-ins, and buyouts.
Apply actuarial and financial principles to structure longevity swap agreements.
Assess pricing, valuation, and risk-sharing in longevity transactions.
Conduct scenario and sensitivity analysis to evaluate risk transfer outcomes.
Ensure compliance with regulatory, accounting, and fiduciary requirements.
Communicate risk transfer strategies effectively to trustees and stakeholders.
Course Content
Module 1: Introduction to Longevity Risk and Risk Transfer Definition and significance of longevity risk in pension plans Financial and actuarial impact of increasing life expectancy Overview of risk transfer mechanisms: swaps, buy-ins, buyouts, reinsurance Case study: Longevity risk in DB pension schemes Group discussion: Challenges in managing longevity risk Module 2: Legal and Regulatory Framework Regulatory requirements for longevity swaps and risk transfers Fiduciary duties of trustees and plan sponsors Accounting standards for risk transfer arrangements (IFRS, IPSAS) Exercise: Mapping regulatory obligations for a hypothetical longevity swap Case study: Regulatory challenges and lessons learned Module 3: Actuarial Principles for Longevity Risk Mortality and longevity assumptions Modelling longevity risk and projections for pension populations Calculating expected and unexpected longevity liabilities Exercise: Estimating longevity risk for a sample pension plan Discussion: Best practices in actuarial assessment of longevity risk Module 4: Structuring Longevity Swaps Types of longevity swap structures: single cohort, multiple cohort, population-based Determining notional amounts, reference populations, and payment streams Roles of counterparty, sponsor, and trustee Practical exercise: Designing a longevity swap for a hypothetical plan Case study: Successful structuring of longevity swaps Module 5: Pricing and Valuation of Longevity Swaps Pricing methodologies and financial models Discounting future cash flows and mortality projections Sensitivity analysis for key assumptions: discount rates, mortality improvements, population deviations Workshop: Pricing a sample longevity swap Discussion: Market conventions and valuation best practices Module 6: Risk Transfer Options Beyond Swaps Buy-ins, buyouts, and bulk annuities Reinsurance arrangements for longevity risk Comparing internal funding versus external risk transfer Exercise: Evaluating alternative risk transfer mechanisms for a hypothetical plan Case study: Practical examples of successful pension risk transfers Module 7: Funding and Solvency Considerations Assessing the impact of longevity risk transfers on funding and solvency Asset-liability matching strategies with risk transfer instruments Stress testing and scenario analysis for transferred risks Workshop: Evaluating solvency impact of a longevity swap on a DB plan Discussion: Mitigating residual risk after risk transfer Module 8: Accounting and Reporting Accounting treatments for longevity swaps and buyouts Recognition, measurement, and disclosure requirements under IFRS and IPSAS Reporting obligations to trustees, auditors, and regulators Practical exercise: Preparing financial statements reflecting a longevity swap Case study: Transparency and reporting best practices Module 9: Communication and Stakeholder Engagement Explaining longevity risk and risk transfer strategies to trustees and members Visualizing potential outcomes and risk mitigation benefits Preparing executive summaries and presentations for decision-making Group exercise: Presenting a longevity swap proposal to a board Discussion: Effective communication of complex financial instruments Module 10: Case Studies and Practical Applications Review of real-world examples of longevity swaps and risk transfer solutions Group simulation: Structuring, pricing, and evaluating a risk transfer strategy for a hypothetical pension plan Lessons learned and industry best practices Developing actionable recommendations for managing longevity risk sustainably Final discussion, review, and certification
