UK- Increased life expectancy cost British companies an additional £20bn in pension liabilities in 2005, research by KPMG has found.
In 2005, pensioners were expected to live an average 19.4years past 65 - or to just over 84 - compared with 18.4 years past 65 in 2004, the KPMG survey revealed.
The data was collected from over 200 companies across the UK.
Without the extra £20bn, the pension liabilities for listed British firms already total £500bn.
The survey showed that financial sector firms expected staff to live a year longer than the average of other firms and therefore were particularly affected.
There was also a wide disparity in mortality assumptions between companies, KPMG found, with differences of five years in the financial sector and around nine in other sectors.
Head of KPMG's pensions practice Alastair McLeish (pictured) said that although each company’s workforce profile differed, “it seems unlikely that such widely diverging minimums and maximums can both be right.”
He said that to tackle pension liabilities effectively, more and better research was needed into the life expectancy of pension scheme members.
Lynn Pearcy, a financial reporting technical partner at KPMG, said the firm would welcome a call from the UK's accounting standards board for additional life expectancy disclosure.
By Angele Spiteri Paris
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