Company pensions to amend assumptions February 15th, 2008
Companies that still offer final salary pension schemes, may need their valuers to amend the life expectancy calculation used to determine expected costs. As people are living longer, it makes sense to review the calculation. However this won’t be good news for companies with such scheme as each additional year can increase costs by 3% to 4%.
With increasing final salary pension costs almost inevitable, this could be another nail in the coffin of such schemes. We’ve already seen that Group SIPPs are likely to be the way forward for company pensions and this latest move could speed up the switch.
