JLT has become the first actuarial consultancy to implement Club Vita’s longevity analytics capabilities through RiskFirst’s PFaroe modelling system for defined benefit pension plans.
This integrated capability will enable JLT’s defined benefit clients to conveniently set best-estimate longevity assumptions, and strengthen their decision-making.
Matthew Bale (pictured), Chief Strategy Officer at RiskFirst, says: “We’re delighted to give our clients access to the market-leading longevity analytics. Through our collaboration with Club Vita, actuarial consultants and individual pension plans will be able to access, at the touch of a button, fast and customised longevity assumptions.
This continues our mission to offer the very best tools and analytics in the market for our clients, allowing us to deliver user-friendly analytics that continue to improve the interaction between advisors and their clients. Club Vita’s system is best-in-class in terms of longevity analysis so clients will be able to take more confident, data-driven decisions, reducing uncertainty and excessive prudence.”
Douglas Anderson, Founder of Club Vita, says: “It’s now well established that the UK’s diverse population has a wide range of different longevity patterns. Using the national average could over-, or underestimate, the value of a portfolio of pensioners by up to 10 per cent. In the absence of good data, it’s prudent to err on the conservative side.”
“Over the last ten years, Club Vita has identified margins of caution in the longevity assumptions of many large schemes. The challenge for trustees of “smaller” schemes, typically those with fewer than 1,000 pensioners, has been even greater. By integrating Club Vita’s models in RiskFirst’s system, the same market-leading techniques are now available to schemes of all sizes.”
Commenting on the announcement, Steve Robinson, MD Consulting JLT said: “We’re delighted to be able to bring the benefits of Club Vita’s longevity models to our clients automatically through our actuarial valuations, providing them with even better quality information and insight. By tailoring the mortality assumptions at an individual member level, we, along with Club Vita, believe that many schemes could benefit from a windfall funding gain, some as much as a 5 per cent improvement in funding level. For a typical GBP50m scheme, a 5 per cent fall in liabilities means a GBP2.5 million fall in the contributions that the sponsor would ultimately pay or could be redirected for the benefit of further de-risking. Moreover, with Club Vita assumptions being aligned with those in the insurance market, trustees can be more confident of the funding target they are trying to hit.”