Watson Wyatt

Published 02 Jan 2007
Reference 5393
Industry Insurance
Region Europe
Summary

Watson-Wyatt is an advisor to Barclays Bank PLC. The case contains all information the needed to value pension liabilities of Barclays and details about asset composition and benchmarks used in the management of the assets, the various dimensions of risk faced by the pension plan and the way to manage them properly. It also provides an opportunity to discuss governance and moral hazard problems.

Teaching objectives

The case covers the following issues: - How one should value pension fund liabilities - Asset allocation is the key to a pension fund's ability to pay the beneficiaries - Risk dimensions beyond asset risks and how they should be handled: inflation/salary risk, longevity risk, sponsoring employer's risk - Fixes to pensions and to pension fund management

Keywords
  • RD0107
  • AR0607
  • AR2007
  • Corporate Governance
  • Investors, Stakeholders and Accountability