Mortality assumptions 'impacting upon pension fund liabilities'

News Article - 24 July 2007
Category: Business

The mortality assumptions made in the calculating of pension fund liabilities are creating margins of error which could run into tens of billions of pounds, it has been warned.

According to audit firm KPMG, life expectancies vary by up to seven years across all sectors of the UK job market, reducing to five years within the financial services industry.

Workers in the finance field were also found to be likely to live for a year longer than those within other industries.

Head of KPMG's pensions practice Alastair McLeish said that some degree of difference in life expectancy was to be expected because businesses have different demographics.

"However, the ranges that we have found seem rather extreme - particularly in financial services," he said.

Figures released late last year by the Office for National Statistics found that a man aged 65 can now live for another 16.6 years - marking a rise of 3.4 years compared with figures from 20 years ago.

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