The cost of living forever

Most pensioners now exceed actuaries' expectations and are living well into their 80s, which has implications for those with both DB and DC pensions

People are just not dying when actuaries expect them to. That is good news for the people involved and life assurance companies, but creates obvious issues for the pensions industry. The real issue, though, is not so much dealing with the extra costs relating to the pensioners we thought would have died by now, but concerns current workers, most of whom will probably survive well into their 80s, if not beyond that. The values placed on liabilities built up in defined benefit (DB) pension schemes are calculated based on expectations of future life expectancy. Similarly, those expectations ...