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20-May-08 17:15 [Pensions]
Longevity risk threatens pension schemes Several employment bodies have warned that pension schemes could be under threat if the pensions regulator goes ahead with new rules to increase life expectancy rates.
According to the Guardian, the National Association of Pension Funds has responded to the regulator's consultation claiming that the move would "place unnecessary pressure on defined benefit pension schemes".
Current life expectancy rates for male workers are estimated to be 85 or 86, however, the regulator believes the real figure to be 89.
The Confederation of British Industry (CBI) believes that increasing life expectancy estimates could result in the cost of providing a pension rising by four per cent every year.
"Imposing an overly prescriptive regime would undermine the regulator's scheme-specific approach and needlessly raise costs for companies, weakening their ability to keep pension schemes open for future saving," said Richard Lambert, CBI director general.
The Chartered Institute of Management Accountants recently published a report in partnership with Cass Business School warning of the financial repercussions faced by companies in the wake of increased life expectancy.
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