Small does not have to be expensive when it comes to longevity risk suggests Nigel Barlow, Partnership
The principle of longevity risk will, at some point, have been the bane of most readers’ lives; yet thousands of small defined benefit (DB) pension schemes, representing tens of thousands of members are unaware of ways to understand longevity better.
Many schemes are paying more because they...
In the next 20 years, the number of people over the age of 65 in the UK will increase by about 5 million. Projections from the UK Office of National Statistics show that the proportion of people within the UK who are 65 years and older is projected to grow from 17% in 2011 to 25% by 2052.
With this...
People in England and Wales are living longer. There were 20,000 fewer deaths last year than would have been the case if the mortality rate had not improved according to the Actuarial Profession. Its analysis of the latest figures from the Office for National Statistics, shows a further overall...
The Trustee of the Pilkington Superannuation Scheme has insured against the risk of 11,500 current pensioners in the scheme living longer than expected, with around £1bn of associated liabilities, with Legal & General.
At the same time as entering into this agreement, Legal...
Many scheme sponsors could reduce their liabilities substantially by implementing mortality reviews to more accurately predict their scheme’s liabilities. Independent financial advisers LEBC Group claims if such reviews were carried out across the FTSE250, some £1bn of liabilities...
Tim Gordon, Aon Hewitt, on how postcodes can help schemes with predicting and managing their longevity risk
We are living dramatically longer than we ever expected to. In fact, as shown in Figure 1, life expectancy in the UK has overtaken the US and is swiftly catching up with that of France. In any other context this would be good news. However, rising life expectancy is a financial headache for...
Over 3.3 million people in the UK aged 16 and under can expect to celebrate their 100th birthday – over a quarter of that age group according to the latest statistics from the Department for Work and Pensions.
In total, 11 million people alive today are expected to live to 100. Of those 5...
Centenarians will no longer be a rarity. Steven Hood, Club Vita, shows how this will impact on pension provision
More than ten million people in the UK today can expect to live to see their 100th birthday. Furthermore, the Continuous Mortality Investigation (CMI) group’s latest paper on improvements in life expectancy shows that, far from levelling off or slowing down (as in 2009), the rate at which...
Men and women are working longer before retiring, according to the Office for National Statistics.
Men’s average age of ceasing work increased from 63.8 years in 2004 to 64.5 in 2009 while the average age at which women retired from the workplace rose from 61.2 years in 2004 to 62.0 years...
The world’s first longevity index hedge against increases in life expectancy for a pension plan’s non-retired members has been completed.
The trustees of the Pall (UK) Pension Fund and Mercer announced a longevity hedge with J P Morgan, executed and managed by Schroders on behalf of...
With more pension schemes pulling out of potential longevity swap deals in recent months, Pensions World asked
Matthew Bale, PensionsFirst Analytics, how sponsors and trustees should assess the value of such longevity solutions
Longevity swaps seem to be the topic on every pension scheme’s agenda at the moment. Why is this?
The last 50 years have seen dramatic improvements in life expectancy and this trend shows little sign of stopping. In response, actuaries have adopted increasingly conservative assumptions...
The new tables published by the industry-wide Continuous Mortality Investigation (CMI), show that the life expectancy of members of occupational pension schemes has again exceeded expectations. An extra £5bn of liabilities will go onto UK pensions.
However, this average increase...
Steven Baxter, Club Vita, on the challenge of ensuring the sustainability of European pensions amid widespread protests
“Never in the history of opinion polls have French people been so convinced of social injustice,” claimed the political academic Roland Cayrol as over one million workers took to the boulevards of France in September to protest against rises in the retirement age. Strong words, but...
In the first of a new 12-part series, David Ellis, Mercer, puts the case for de-risking and the implications for companies, trustees and members
Bertrand Russell’s rather eloquent quotation “The central problem of our age is how to act decisively in the absence of certainty” neatly summarises much of what trustees of defined benefit (DB) pension plans, and their sponsoring employers behind them, are currently...
More people are reaching 100. Steven Baxter, Club Vita, advises on the financial risk
Extreme age has always been a cause for celebration and wonder: witness the blanket media coverage of Henry Allingham’s achievement this year – sadly for just one month – of the distinction of being the world’s oldest man. Mr Allingham, suitably tongue in cheek, attributed...
Beat the Pensions Crisis by Brian Wood and Claire Brinn (200 pages), ISBN 978 0 273 72205 2, £14.99, available from www.pearson-books.com
This book is a rarity – an accessible work on pensions – and is recommended for scheme members. The pensions crisis is the increasing gap between what people need at retirement and the reality of the pension. The authors give bags of encouragement: despite the serious problem of...
Death for male pensioners living in parts of Glasgow, Middlesbrough and Liverpool is over two and a half times more likely than for those living in areas such as Christchurch, Brockenhurst and Lymington, according to Watson Wyatt.
This postcode effect appears to be much more marked for...
Even pensions professionals are still underestimating the effect of increased longevity on their pension schemes, says Hewitt Associates, a global human resources consulting and outsourcing company. When over 300 delegates at pensions conferences during the autumn were invited by Hewitt to take...
The pensions industry is crying out for more products to manage and mitigate longevity risk urges Anthony Hilton, Evening Standard
Inflation is one of the notable risks which pension schemes face and no one knows what the rate of inflation will be in three months, in three years or in 30 years’ time. In theory this could be a major problem for defined benefit (DB) pension schemes in managing their liabilities. But in...
In the first of a new 12-part series, David Ellis, Mercer, puts the case for de-risking and the implications for companies, trustees and members
Bertrand Russell’s rather eloquent quotation “The central problem of our age is how to act decisively in the absence of certainty” neatly summarises much of what trustees of defined benefit (DB) pension plans, and their sponsoring employers behind them, are currently...
