Builders merchant JT Dove has slashed its forecasted defined benefit (DB) deficit by 11% after completing a medical underwriting study.
Members of the JT Dove Pension Scheme were contacted and assessed to allow the scheme to gain a deeper understanding of the profile of its members' health.
This included a medical questionnaire sent out to all members and, where extra details were required, a phone interview with a nurse.
Around two-thirds of members participated in the study, providing the scheme with enough data to update its mortality assumptions.
This meant the 400-member scheme saw its predicted actuarial deficit fall from £6.2m to £5.5m.
The review was commissioned after the scheme's trustees were concerned the general mortality assumptions used were not accurate for a small scheme, and could either lead to over-funding or under-funding.
The study was conducted by specialist MorganAsh, and advised by Punter Southall.
Trustee chairman Ashley Wilton said the study allowed a better understanding of the scheme's funding needs.
"In the past we'd found it difficult to reconcile some of the mortality assumptions used in the calculation of our liabilities with the actual experience in our pensioner population," he said.
"We felt a medically-underwritten approach, in which scheme members were actually asked for the facts about their health, would help us better determine our pensioner liabilities and, all-importantly, the funding needs of the scheme."
MorganAsh managing director Andrew Gething added a bespoke study was more suitable than general assumptions for smaller schemes.
"In our experience, applying traditional large-scale statistical mortality assumptions to relatively small pension schemes can provide a misleading picture of likely liabilities," he said. "By using an evidence-based approach, focused on real data, trustees and company managements are provided with what we believe to be a significantly more accurate forecast.
"This can affect company valuations and also funding and investment strategies for pension funds."
Punter Southall principal Gerry Devenney said: "Analysing data about the actual physical health and lifestyle of pension scheme members removed the need for unnecessary margins of prudence and allowed the trustees and sponsors to arrive at a more realistic estimate of their liabilities."
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