UK - Mercer Human Resource Consulting says it has launched interactive pensions modelling software called Provecta.
“The tool is designed to help companies and trustees understand how increasing life expectancy will affect their defined benefit pension scheme liabilities,” the company said in a statement. It did not say how much the system would cost.
“Mercer has analysed the initial results from mortality investigations by the actuarial profession and concluded that many pension scheme reserves for increases in life expectancy will be inadequate,” it added.
It said that existing funding programmes would “therefore need to be reviewed”. It said that, in many cases, contributions will have to be increased to fund the longer period over which pensions will be paid.
"Mercer Provecta helps employers and trustees understand the cash flow impact of increases in future life expectancy for both their retired and non-retired members and also shows the impact on liability values,” said Deborah Cooper, senior research actuary at the firm.
“A key feature of the software is that it allows for variations in life expectancy by geographical location and by occupation.”
Cooper said: “Mercer Provecta is interactive and easy to use. It will give trustees and companies confidence that scheme-specific factors have been assessed and, most importantly, will support strategies to manage longevity risks."