Covid-19 leaves schemes overestimating pension liabilities by up to 3.5% - research

Hope William-Smith
clock • 2 min read

The full impact of the Covid-19 pandemic means many defined benefit (DB) schemes will have now overestimated the life expectancies of their members, research suggests.

Data from XPS Pensions on 22 March found pension liabilities may be overstated by between 1.5% and 3.5% as the full impact of the last 12 months on member longevity starts to become clear. The range would imply a potential reduction in UK company accounting pension costs of between £25bn and £60bn, the consultancy estimated. "Without consideration of how the pandemic has affected their members, schemes risk overstating their liabilities and ignoring key information when making decisions on risk management and long-term strategy," said head of demographics Steve Leake. A low interes...

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