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Lifetime Pension Pools and Longevity Risk Sharing

Closeup of the word pension in a newspaper.

Barbara Sanders and Jean-François Bégin provided insights on how Canada’s regulatory framework presents challenges to lifetime pension pools and variable payment life annuities (VPLA) and how they may offer improved retirement income outcomes for retirees.

Lifetime pension pools were explored as a potential solution for converting retirement assets into retirement income. The various advantages of lifetime pension pools, such as lifetime income, mortality pooling, and access to potentially significant economies of scale, were highlighted.

Bégin focused on introducing BaR, a new benefit at risk measure that addresses the potential benefit losses related to the shortfall in lifetime pension pools was discussed. This measure is intended to improve communication and disclosure to plan members regarding the associated risk of benefit loss. Sanders highlighted the success of the UBC Faculty Pension Plan’s VPLA offering as a model to follow.

Also emphasized is the need for regulation on pricing and product design, strong governance, and transparency in the pension community and acknowledged that the securities paradigm is advanced in this regard.

The presentation concluded by highlighting the potential use and scope for lifetime pension pools in the Canadian market.

Read more about BaR:
Benefit at Risk for Lifetime Pension Pools


Barbara Sanders headshot
Jean-François Bégin

Barbara Sanders
FSA, FCIA, MSc Associate Professor Simon Fraser University

Jean-François Bégin
FSA, FCIA, PhD Assistant Professor Simon Fraser University