Companies 'must plan for longer life'

Click to follow
The Independent Online

the country's biggest companies may have to pay more into their staff pension schemes as their employees live longer and as low interest rates erode investment returns, according to the pension consultants Mercer.

Britain's 100 biggest listed companies raised the assumed life expectancy of pension scheme members by four months on average in 2010, equivalent to a 1 per cent increase in scheme liabilities, according to a Mercer survey.

FTSE 100 employers have now raised staff longevity estimates for five years in a row, adding 2.5 years to their employees' expected lifespan and increasing their pension liabilities by 6 per cent, Mercer said. On average, they now expect a male 65-year-old to live to 87.

Improved life expectancy added £5bn to British corporate pension obligations last year, according to consultants Aon Hewitt. Reuters