New models for ailing pensions
Pension fund managers are turning to quants for help during their darkest hours. Navroz Patel looks at some of the latest developments and prospects for stochastic models
Pension fund managers are in a tailspin. Both public and private schemes are struggling to find yield in bear markets. In addition to unfavourable demographics, managers of corporate schemes have the added problem of the pressure exerted on corporate solvency by a growing funding gap (see box). “State schemes will not be able to pay up, so they are trying to unload pensions on to the private sector. Corporates won’t be able to pay up, so they are closing defined-benefit schemes to
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