Understanding a pension scheme’s full exposure to risk is vital for any trustee or scheme sponsor especially when executing a pension de-risking plan. People are now drawing on their pensions for longer, affecting pension scheme reserves and corporate profitability.
Not knowing the true constituents of a pension scheme or life plan could distort the associated risk. Life expectancy alone is not enough when determining liabilities – socio-economic variances and marital status should also be examined in the pension de-risking process.
The established approach to valuing pension liabilities is to appraise member age and gender in addition to the size of the pension. Today, with additional data solutions available to the Life and Pension industry, we are able to exploit this information and help strengthen actuarial projections and potentially remove adverse insurer margins.
As a rule, a scheme member’s spouse will receive benefits upon the demise of a partner, and as a consequence, the existence of a spouse could materially increase the cost of providing pension benefits. This creates significant grounds to establish who within a database is single or married… which is why we have developed a pension de-risking solution to help confirm marital status of scheme members.
Driven by the need to understand the potential additional risk within a scheme attributable to the marital status of its members, our solution is available either as a managed service or available within our easy to use, self-administered portal. On conclusion, we provide our standard management information (MI) report that includes the following classifications for each member: