PT  - JOURNAL ARTICLE
AU  - Guy Coughlan
TI  - First Steps in Longevity Risk Management
DP  - 2014 Sep 21
TA  - Special Issues
PG  - 10--16
VI  - 2014
IP  - 1
4099  - https://pm-research.com/content/2014/1/10.short
4100  - https://pm-research.com/content/2014/1/10.full
AB  - Defined benefit (DB) pension plans should evaluate their sensitivity to longevity risk in order to quantify its impact and facilitate more effective plan-management strategies. While this might seem daunting at first glance, doing so is easier than is commonly thought. We advocate the use of a particular measure of longevity sensitivity called q-duration, which measures the sensitivity of the value of the pension liabilities to changing mortality rates. The q-duration of a pension plan can be calculated easily by plan actuaries. As part of this process, we recommend a mortality mark-to-market, to ensure that plan mortality tables are aligned with the demographic profile of beneficiaries and up-to-date relative to currently observed mortality rates.