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PWC offers £30bn hope for pension liabilities

Defined-benefit pension liabilities may have been overstated by up to £30bn, says PricewaterhouseCoopers.

It says new mortality tables for self-administered pension schemes, issued by The Actuarial Profession, show that life expectancy for scheme members is less than predicted by the insurance-company-based tables used by many schemes for accounting and funding assumptions.

Failure to allow for this difference would lead to an overstatement of total DB pension liabilities by £30bn, it says.

However, PWC director Richard Giles warns that rather than “blindly adopting the new data as fact, companies and trustees should assess schemes individually to ensure they make appropriate accounting and scheme-funding decisions”.

He says huge sums are at stake and cash-strapped firms should ensure that they use their capital in the most effective way.

Hargreaves Lansdown head of pensions research Tom McPhail says: “Anything that eases pressure on DB schemes has to be seen as good news, so if PWC is right, I am sure that employers will welcome the easing of funding pressures that this should bring.”

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