'Search for yield' by pension funds poses big risks, warns OECD

Tokyo

THE current low interest rate environment around the world poses a significant risk for the long-term financial viability of pension funds and insurance companies, the Organisation for Economic Co-operation and Development (OECD) warned on Wednesday.

Chief among the concerns is that pension funds and life insurance companies might become involved in a "search for yield" in order to match the levels of returns promised to policyholders and beneficiaries when interest rates were higher.