The brief’s key findings are:
- “Longevity bonds” would allow insurers and pension plans to hedge aggregate longevity risk.
- The bonds’ coupon would rise if a cohort lived longer than expected, offsetting higher annuity costs.
- Longevity bonds would lower capital requirements for insurers and reduce risk for pension plan sponsors.
- Governments could take the lead in issuing such bonds and gradually shift most of the responsibility to the capital markets.