Mercer completes $2.5 bln longevity hedge for pension fund
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LONDON, Nov 16 (Reuters) - Consultancy firm Mercer has completed a 2 billion pound ($2.48 billion) so-called longevity swap to insure against longer than expected payouts to 14,500 members of the MMC UK Pension Fund.
Mercer, part of risk and strategy services company Marsh McLennan, said the move to hedge against the risk of defined benefit (DB) pension scheme members living longer than expected is the first ever swap to include members who are still paying into a pension scheme.
Longevity swaps can protect against higher than expected pension payouts on DB schemes, which offer a guaranteed level of pension linked to an employee's salary. ($1 = 0.8078 pounds) (Reporting by Huw Jones Editing by David Goodman)
