丁香园AV

丁香园AV Statistics and Actuarial Science professor Jean-Fran莽ois B茅gin and Mathematics professor Mathieu Boudreault of Universit茅 du Qu茅bec 脿 Montr茅al (UQAM) have received $160,000 from National Sciences and Engineering Research Council (NSERC) and Retraite Qu茅bec to study the effects of climate change on the long-term viability of public and private pension funds.

鈥淚n light of climate change, assessing risk and dealing with unknown unknowns is very difficult,鈥� B茅gin says. 鈥淭he past is not necessarily a guide to the future as we are entering uncharted territories.鈥�

Canadians have invested over $3 trillion in pension funds to support their retirement. However, climate change has the potential to disrupt the viability of these pension plans due to its impact on economic growth and demographics.

B茅gin explains that climate change affects both sides of the balance sheet. Economic instability and changes to many sectors of the economy impacts funds鈥� assets by affecting the rate of return when members鈥� contributions are invested. At the same time, changing birth rate, mortality and immigration patterns affect funds鈥� liabilities, the reserves set aside to pay members after they have retired.

The researchers plan to use probabilistic models to create a framework that captures the interactions between climate change and pension assets and liabilities, as well as economic and financial data to develop parameters for this framework.

Their goal is to create a climate-based methodology that will enable actuaries and risk managers to model and assess risk in pension funds, become climate change leaders while managing pension funds, and accelerate the implementation of climate initiatives in pension risk management practices.

鈥淲e do not really know what the world will look like 25鈥�50 years from now,鈥� B茅gin says, 鈥渂ut actuaries still need to provide sound and reliable answers to different financial stakeholders about the risks they are facing.鈥�