UK - The Pensions Regulator has welcomed the publication of a library of mortality projections by the actuarial profession, reinforcing the need for actuaries to focus on the most up-to-date assumptions regarding future mortality.
The library is the initiative of the Continuous Mortality Investigation (CMI), a research body of the actuarial profession.
In a related move, the Presidents of the Faculty of Actuaries and the Institute of Actuaries have written jointly to those actuaries with certificates that allow them to hold specific roles in relation to pension schemes and life insurance companies.
This letter welcomed the publication of the library and emphasised the need for actuaries to understand developing trends.
Commenting on the mortality projections, David Norgrove, chairman of the Pensions Regulator, said the data suggested the life expectancy of pensioners was continuing to improve rapidly .
He said: “This is important for the trustees of defined benefit pension schemes as mortality assumptions have major implications for the liabilities that schemes will face. They need to consider carefully the assumptions they make to ensure that their schemes are funded on a prudent basis.”
Wallace Wormley, managing director of investment consultancy firm OSPARA, warned the projections meant the cost of providing pensions and annuities could soar by billiions of pounds.
He said: "The issue related to the liabilities of pension funds has not been adequately addressed in the UK."
Nick Dumbreck, president of the Institute of Actuaries, said: “Actuaries have always been expected to satisfy themselves that they are using suitable assumptions for future mortality. However the absence of mortality projections in the most recent (“00” Series) tables has put increased responsibility on individual actuaries.”
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