UK - Trustees from smaller pension funds have been urged to conduct more scheme specific analysis on mortality risk.
Speaking at a conference hosted by Punter Southall and law firm Blake Lapthorn Tarlo Lyons, Joanne Livingstone, principal at Punter Southall, explained that in the past, only the largest schemes had enough data available to draw up a scheme specific mortality table based on their own experiences.
However, Livingstone said there was now a substantial body of information available about current death rates and how they may vary depending on the membership of the scheme.
The information enables trustees to look, not just at the deaths that have occurred in the scheme, but also at the socio-economic characteristics of the membership when deriving mortality assumptions.
Livingstone said: “The Pensions Regulator emphasised that trustees should use up-to-date mortality tables and reflect their own membership when deriving mortality assumptions, so it seems likely that schemes will increasingly use the latest mortality tables and adjust the death rates up or down depending.”
Livingstone explained that currently one in 300 65 years old males was expected to live to 120, and based on some projections, it may rise to one in 20 within 35 years.
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