Companies could shave £230bn off pension deficits by refining approach to life expectancy projections - PwC

New figures released today from PwC’s Skyval Index show the deficit of defined benefit (DB) pension funds stood at £470 billion at the end of January 2017.

However, £230 billion of this relates to potential life expectancy improvements a long way into the future, and need not be pre-funded over the next decade.

Alternative approaches could save pension sponsors up to £30 billion a year.

PwC’s Skyval Index, based on the Skyval platform used by pension funds, provides an aggregate health check of the UK’s c.5,800 DB pension funds.

The current Skyval Index figures are:

Assets

Liability target

Deficit

Funding measure

£1,480bn

£1,950bn

£470bn

Accounting measure

£1,480bn

£1,800bn

£320bn