Present values or cash flows
I've been thinking about pension scheme valuations. Much of the discussion in this area is around what discount rate should be used to put a value on the liabilities. This means there is an implicit assumption that discounting the liabilities and comparing...
Why annuity rates matter
A new report has shown that annuity rates have halved over the last 15 years, not least because of falling gilt yields. This is clearly important for people retiring from defined contribution plans, but it is also important for defined benefit schemes and...
Why women outlive men
New research has found a possible genetic explanation for why women live longer than men on average. It seems that the gene that makes male mice stronger than female mice also weakens their immune system. Researchers discovered this by creating mice with...
Risk-free rates for pensions
According to Professional Pensions, the Accounting Standards Board is standing by its plans to move to risk-free rates when valuing pensions for accounting purposes. Moving from the current approach (which uses AA-rated corporate bond yields) to a...
Church pensions – seeing past the headlines
An article in today's FT considers a proposed reduction in the rate of pension accrual for Church of England clergy, referring to the poor performance of the pension scheme's assets due to the heavy investment in equities. There are a couple of problems...
Breaking up the banks
It seems that the nationalised UK banks are due to be broken up in response to a perceived lack of competition. This is a sensible move, and could also have a further benefit: it could reduce the number of financial organisations that are "too big to...