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Webinar on Long-term bonds: different ways to support – and benefit from – pensions’ needs

April 3, 2019

World Bank Treasury

Lengthening the maturities of public debt portfolio to mitigate refinancing risk has always been a challenge in many developing countries. The usual constraint to achieve higher average time to maturity through the issuance of long-term bonds resides on the low diversification of the investor base and on the under-representativeness of pension funds and insurance companies. Managing long-term liabilities, pension funds and insurance companies in the annuity business have the ability and the desire to invest in these long-dated securities in a way to mitigate credit and reinvestment risks.   

Beyond debt management objectives, governments have also interest in fostering long-term savings as a mean to finance important investment needs as the ones in infrastructure. Besides that, having well managed pensions that guarantee citizens’ retirement income has been proven instrumental in avoiding the realization of contingent liabilities that can seriously impact future fiscal balances.

The objective of this webinar is to discuss (i) alternatives of issuing long-term government bonds to meet demand for retirement income investments, (ii) and to examine how governments can benefit from the issuances for building a longer-term and less risky public debt profile. Dr. Arun Muralidhar, Co-founder of Mcube Investment Technologies (and formerly with the World Bank Treasury), will share his perspectives on an innovative new bond idea called Standard of Living indexed, Forward-starting, Income-only Securities (SeLFIES). Mr. Rodrigo Saráchaga, a Senior Advisor at the Public Debt Management Unit of Ministry of Economy and Finance of Uruguay, will share the country experience on issuing wage-indexed bonds.

Mr. Lior David-Pur, Head of Government Debt Management Unit of the Ministry of Finance of Israel, will discuss the opportunities, risks and challenges on the presented alternatives, as well as solutions currently adopted in his country. Finally, Mr. Monte Tarbox, the Executive Director for Investments at the National Electrical Benefit Fund, will bring the buy-side perspective for the discussion.  A Q&A session will provide the participants with the opportunity to discuss and share other experiences and lessons learned.