UK: DB pension schemes – new fall in life expectancy assumptions?
New guidance from The Pensions Regulator, alongside new information collected from insurers and reinsurers, is likely to lead to a fall in life expectancy assumptions due to the impact of the pandemic on future deaths.
Some of the key factors that are affecting how DB pension scheme stakeholders set their mortality assumptions in light of the pandemic. In particular, the factors could be put into two broad categories:
- Factors that directly affect how long members are likely to live for in the future, such as missed diagnoses and treatments during the pandemic, the health implications of long-covid and better public hygiene.
- Indirect factors such as guidance from The Pensions Regulator and the approach taken by insurers in their bulk annuity pricing.
While the picture relating to the direct factors isn’t any clearer, new information is now available on the indirect factors. This blog explores how the new information will affect how you go about setting your pension scheme mortality assumptions.
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