Just what we need: weapons of mass financial destruction for pensioners.

The deal struck by two of Babcock International’s pension schemes to cap their exposure to members who live longer than expected is what the pension industry has been waiting for. But despite the self-interested applause of the consultants, is now, in the wake of a financial crisis and on the eve of a flu pandemic, really the moment to be marketing a new type of derivative – longevity swaps – backed by investment banks?