Grant Thornton
Grant Thornton’s pension advisory team worked with MorganAsh on a large DB pension scheme sponsored by a professional services company. The purpose was to understand the health and marital status of its scheme membership in far greater detail.
Like many professional services or more white-collar industry firms, assumptions are made solely on a traditional approach of postcode and income analysis which suggested longer than average life expectancy.
However, when Grant Thornton instigated a MUMS (medically underwritten mortality study) with MorganAsh to gather information on the health of the scheme members, this more accurate analysis showed that this traditional approach was likely overstating life expectancy and the proportion of members who were married.
The overall result in financial terms was a material £15 million reduction in deficit on both funding and accounting bases. Grant Thornton’s pension team presented the data to the trustees’ advisers; the scheme actuary and longevity expert and both sides analysed this data in detail, alongside historical experience, to agree changes to the current assumptions.
“In our view, every sponsor of a DB scheme should think about if there is a more accurate way of assessing the demographics of its membership. The key is to understand the data in detail, how the findings interact with the typical pension scheme tables used, and the implications for life expectancy. Also key is to work with the trustees’ advisers in a collaborative way to identify the most appropriate assumptions.”
