first_imgCharles Rodgers, a consultant actuary with Towers Watson, said: “The concerns around companies in the UK, and possibly elsewhere, taking a multi-billion-pound hit have reduced. The scope [of the changes] is more narrowly focused.”
He continued: “As a result, the likely impact, in the aggregate, is much smaller than people might have feared.”Rodgers warned, however, that there might be plan sponsors who have interpreted IFRIC 14 in a particular way who could yet discover they are no longer entitled to an unconditional right to a plan surplus.“For those entities, this could be an issue,” said the Towers Watson expert.The IFRS approach to pensions accounting is set out in IAS19.In 2007, the IFRS IC’s predecessor issued IFRIC 14, which interprets the requirements of the pensions standard.Paragraph 58 of IAS19 limits the measurement of a DB asset to the “present value of economic benefits available in the form” of refunds from the plan or reductions in future contributions to the plan.And IFRIC14 deals with the interaction between a minimum funding requirement and the restriction in paragraph 58 on the measurement of the DB asset or liability.When a DB plan sponsor applies IAS19, it must first measure the DB obligation using the projected unit credit method, on the one hand, and fair value any plan assets on the other.This calculation will produce either a DB asset or liability at the balance sheet date.Where a plan is in surplus, the sponsor recognises the lower of any surplus and the IAS19 asset ceiling – that is, the economic benefits available to the sponsoring entity from the surplus.More recently, a constituent has asked the committee to consider whether preparers should take account of events that might disrupt the plan unfolding in line with the IAS19 assumptions when they apply IFRIC14.An example would be the trustees of a DB scheme whose future actions could reduce the ability of a sponsor to recognise an asset.For example, the trustees of a plan might have the power to augment members’ benefits or wind up the plan and purchase annuities.The committee previously discussed the issue during its March, May and July meetings this year.Based on those discussions, advisers, among them Aon Hewitt in the UK, warned that the potential impact of any changes to IFRIC14 could adversely affect plan sponsors.Accounting specialist Simon Robinson told IPE: “The approach the IFRS IC appears to be taking now is focused on two quite narrow issues. If they proceed down this route, I expect any changes they make to IFRIC 14 will have virtually no effect.“My concern earlier this year, based on its discussions, was that the committee could be on the verge of making some far-reaching changes to IFRIC 14. That fear appears to have receded somewhat now we have seen the likely drafting.”The Aon Hewitt actuary said it was “quite rare” in the UK, the apparent focus of the committee’s discussions, for trustees to have a unilateral power – a super power – to augment member benefits or wind-up the plan by buying annuities with an insurer.Instead, he said, the committee “seems to be drawing a distinction between a buyout of a plan and a buy-in, which is where the trustees buy the same annuity policy but in their names not the members’ names”.Robinson continued: “In the case of a buy-in, we expect the committee’s amendments to confirm that is treated as an investment decision like any other investment decision by a sponsor.”Committee staff noted during the 16 September discussion: “Trustees’ unilateral power to buy annuities is different from the power to wind up a plan and is not enough to affect the asset ceiling by itself.”The committee’s technical chief, Michael Stewart, said during the meeting: “Where you are enhancing the benefits, you are changing the pension promise, and that’s how I would distinguish between the two. When you are buying annuities, you are not changing the pension promise.” The International Financial Reporting Standards Interpretations Committee has voted through an amendment to its asset-ceiling guidance.The committee, responsible for interpreting the requirements of IFRSs such as International Accounting Standard 19 (IAS19), Employee Benefits, reached the decision during its 16 September meeting in London.Advisors who spoke with IPE cautiously welcomed the committee’s proposals, which affects how plan sponsors account for defined benefit (DB) pension obligations.The experts said changes to the treatment of the IAS19 asset ceiling now appear to be less controversial than they had at first feared.last_img read more

first_imgHe said he would remain as a board member at the €59bn metal scheme PMT, as well as a lecturer at the business university Nyenrode.Before he joined SPF Beheer in 2002, Akkerman served as chief executive at a KLM pension fund and the social fund for the painting sector (SFS), as well as chairman of the company pension fund SPS.He was also on the board at Aegon Pensioen.SPF Beheer, which sought a candidate with a “broad and generalist profile” to replace Akkerman, cited Kreikamp’s experience in client service, organisation, IT and implementation.SPF Beheer is pensions provider for the large railways scheme SPF and the public transport pension fund SPOV.The company has almost 20 clients in total, including the sector schemes PNO Media and Horeca & Catering. Albert Akkerman has announced his departure as chief executive at the €18bn asset manager and pensions provider SPF Beheer, after almost 14 years in the job.Akkerman said he planned to retire on 1 July and that, between now and then, he would help ensure a smooth transition for his successor, Edwin Kreikamp.Kreikamp, a member of the executive board at insurer ASR Pensioen, is to start at SPF Beheer on 1 March and assume the chief executive position on 1 April.Akkerman said his departure had been planned “for a long time” and that he always planned to leave at 64.last_img read more

first_imgPhilip Green, former owner of insolvent UK retailer BHS, has criticised the UK pension regulator’s behaviour in settling a dispute over the company’s pension funds, saying attempts to resolve the matter have “hit a brick wall”.Discussing new attempts to restructure the retailer’s two pension funds, which reported a buyout deficit of £570m (€747m) when BHS closed earlier this year, Green, chairman of Arcadia Group, criticised The Pensions Regulator’s (TPR) approach.Speaking at a joint hearing of the work and pensions committee and the business, innovations and skills committee in the House of Commons, Green lamented he had not heard from Lesley Titcomb, chief executive of TPR, to meet in person.“Does that sound as if somebody wants to fix it?” Green questioned, during a six-hour hearing that was at times bad-tempered. TPR is currently conducting an anti-avoidance investigation into last year’s sale of BHS to Retail Acquisition for a token sum.The businessman told MPs he was hoping to revive a previous proposal to restructure BHS’s underfunded schemes.Discussing talks with Malcolm Weir, the Pension Protection Fund’s (PPF) head of restructuring and insolvency, Green said Weir had been “extremely helpful”.“And then, unfortunately, we hit a brick wall when it comes to trying to arrive at the regulator,” he added.Green repeatedly criticised the regulator, saying it took them “a long time to respond to anything” and questioned pensions minister Ros Altmann’s decision to avoid a meeting with him.“I attempted to contact Baroness Altmann,” Green told the committee. “She said, ‘My team have told me not to interfere – they are dealing with it’.“I thought that the boss basically sat above the team, as you are telling me I do.”Green also aired his concerns about the PPF’s charging of a now risk-based levy to fund itself, recalling that a decision to no longer recognise a company guarantee led to BHS’s levy charge increasing “from around £200,000 to about £3m”.Saying he questioned the need for such a high levy to be paid, a point he raised with former pensions minister Steve Webb in a meeting, Green explained he would have rather paid an additional £3m in deficit-reduction payments to the BHS fund than see the monies go to the UK lifeboat scheme.Any attempt by Green to restructure the BHS schemes to avoid their entry into the PPF is likely to be costly, as the funds were assessed as having a £275m deficit to meet the lifeboat fund’s lower funding standards.Any restructure, which would involve lump-sum payments to most scheme members, would likely have to match, or exceed, benefit levels guaranteed by the PPF.last_img read more

first_imgHowever, the asset-allocation shift does not appear to have had an impact on the overall funding position of UK schemes.The combined deficit of the PPF’s universe of pension schemes was £221.7bn (€260.7bn) on a section 179 basis at the end of March, the Purple Book showed.At the end of October, this had risen to £328.9bn.At a press briefing launching the Purple Book this morning, the PPF’s CFO Andrew McKinnon highlighted that average deficit recovery periods had changed little in the 10 years since the Purple Book was first published.The Pensions Regulator was quizzed on the length of some schemes’ plans by the government’s Work and Pensions Select Committee earlier this year, after it emerged that one scheme had put forward a 23-year recovery proposal.Alan Rubenstein, chief executive of the PPF, said “about three-quarters” of schemes had recovery plans of less than 10 years.McKinnon said: “When we look back at what progress schemes have made over the last decade, it appears that many schemes are just treading water.“The average recovery plan length, at around eight years, has barely improved, which brings home the challenge we now face.” UK pension schemes’ average allocation to bonds hit 50% for the first time at the end of March, according to the Pension Protection Fund (PPF).Private sector defined benefit (DB) funds had an average of 51.3% allocated to fixed income at the end of the 2015-16 financial year, up from 47.7% the previous year, according to data from the latest iteration of the PPF’s Purple Book of defined benefit (DB) scheme data.The average equity allocation fell to 30.3%, compared with 33% 12 months previously.Since the Purple Book was first published in 2006, this figure has halved as pension schemes have sought to de-risk and diversify their assets.last_img read more

first_imgManagement fees charged by some 2016 vintage private debt funds reached an eight-year low last year, after four years of falling fees for funds in the sector, according to alternative assets data and analysis firm Preqin.In its 2017 global private debt report, Preqin said the average (mean) management fee for private debt funds had fallen from 2.08% for 2013 vintage funds to 1.63% for 2016 vintage funds.Ryan Flanders, head of private debt products at Preqin, said: “The majority of private debt investors do believe that their interests are aligned with those of their fund managers.”A quarter of investors polled said terms had changed in their favour over the past few years, he said. “This general consensus and the diminution of the average industry-wide management fee charged by private debt managers suggests that investors are making ground in moves to equalise the trade-off between fees and fund manager expertise,” Flanders said.The research firm said that the spread of management fees across separate private debt strategies reflected the complexity of portfolio management, which varied according to strategy and fund size.Direct lending funds charged the lowest fees, Preqin said, because as vehicles with no equity component they were less expensive for the manager. Venture debt funds had higher fees because deploying early stage funding used a lot of resources.Preqin found that only 6% of private debt investors said they never invested due to the terms and conditions on offer.A fifth of investors often chose not to invest, and 74% occasionally decided not to invest because of fund terms, the data showed.Last year, Preqin said an aggregate $93bn (€88bn) was raised internationally across 131 private debt funds which closed in 2016, with this figure likely to rise as more data became available. This is likely to mean that 2016’s final figure will be at or near 2015’s level of $97bn.In its report, the firm said the trend towards a greater concentration of capital among fewer funds continued in 2016, with 16% fewer funds closing in that year than had in 2015, and the average fund size increasing to $710m.Last week, investment advisory group Siglo said competition has pushed down fees for senior secured loan funds in Switzerland.last_img read more

first_imgAccording to Geers, APG planned to make an initial commitment of €250m from its clients’ pooled assets for emerging market equities. He added that APG’s intention was to increase the investment over time.At the moment, APG doesn’t have any exposure to Chinese A-shares in its €451bn portfolio.Geers added that the fund would be co-managed by APG through a joint management team of employees from the Dutch manager and EFM.In a joint statement, Ronald Wuijster, acting chief executive of APG Asset Management, said APG was pleased “to embrace its role and duty as responsible long-term investor for the benefit of its clients”.“Our responsible investment approach, combined with local intelligence, will create unique investment opportunities in China,” he added.Wuijster also indicated that APG would like to set a trend and share its expertise with other institutional investors.Sau Kwan, president of EFM, said co-operation with APG would bring “world-class” ESG investment experience to her company’s market place.“E Fund Management is already a member of the UN’s Principles for Responsible Investment and we have been equipping ourselves for ESG investments for quite some time,” she said.“We are excited to translate our efforts into a tangible investment strategy, which we are confident [will] produce positive investment returns, and to expand the positive impact to a more sustainable community beyond financial performance.”APG is the largest manager of pension assets in Europe and one of the largest fiduciary managers worldwide. It has offices in the Netherlands in Amsterdam and Heerlen as well as in Hong Kong and New York.With RMB1.1trn (€139bn) of assets, E Fund Management is one of the three largest fund managers in China. Headquartered in Guangzhou, it has offices in Beijing, Shanghai, Hong Kong, Nanjing, Chengdu, Dalian and New York.A-shares are domestic listed shares of Chinese companies. More than 200 are to be added to MSCI’s indices next year. Dutch asset manager APG has committed €250m to a China A-shares fund with a responsible investment focus.APG has teamed up with Chinese asset manager E Fund Management (EFM) for the launch, which the firms said was the world’s first A-shares fund with such a focus.“The fund will provide access to the investment market of mainland China and will focus on equity of a limited number of listed companies,” said Harmen Geers, spokesman for APG.In addition to environmental, social and governance (ESG) criteria, companies in the portfolio would also be selected for their risk-return profile, he said.last_img read more

first_imgFocusing on precise measurements may be missing the point. Behaving ethically and responsibly should not be a choice for companies or for investors. But attempting to collate data for how well companies adhere to ESG criteria produces figures that are as much artefacts of the measurement algorithms as they are any underlying scale of ‘goodness’.Seeking absolute proof when it comes to the benefits of concepts such as ESG may be misguided in any case. Economics is not a science, but a methodology and framework for analysis. It is ultimately dependent on explaining human behaviour rather than absolute facts. Does adopting an ‘ESG’ (environmental, social, corporate governance) focused approach to investment give higher returns?The jury is still out, but trying to prove or disprove the hypothesis may be a pointless task. The answers will vary depending on the time period chosen, while the unknown error margins in any analysis as a result of varying ESG screening methodologies are too large for any conclusive statements to be made in any case.Kate Allen, capital markets correspondent at the Financial Times, made that point emphatically in an article on 6 December, quoting a recent report from Asian investment bank CLSA and the Asian Corporate Governance Association. This report noted the lack of consistency between different ESG scoring methods.The most pronounced example was Tesla, which FTSE rated last whilst MSCI rated first in the ESG listings. “Just because you can measure this stuff doesn’t mean that you necessarily should,” declared Allen. Perhaps there should be a greater appreciation of the error margins in such measurements . Source: R W Rynerson Robert F Kennedy on the presidential campaign trail in 1968Economic growth rates lie at the heart of government policy. Yet “GDP measures everything, in short, except that which makes life worthwhile”, declared Robert F Kennedy in a famous speech given at the University of Kansas in 1968.“It can tell us everything about America except why we are proud we are Americans,” he added. “If this is true here at home, so it is true elsewhere in world.”“Gross national happiness is more important than gross national product,” said Jigme Singye Wangchuck, the king of Bhutan, in 1972. That is true even if happiness is not easy to measure.Managing the measuresThe phrase ‘you can only manage what you can measure’ may carry a lot of wisdom but it also has inherent dangers.“The financial system equates human values with financial value, and measures value as the market price. This is proving catastrophic for the economy, society and the planet”Goodhart’s Law – named after economist Charles Goodhart – states that “when a measure becomes a target, it ceases to be a good measure”. The law is implicit in the economic idea of rational expectations: entities that are aware of a system of rewards and punishments will game the system to achieve their objectives. Perhaps applying ESG scores to companies may come into that category if companies end up gaming the system to generate higher ESG scores.Mathematical approaches to economics have dominated economic thinking and formed the basis of economics applied to investments. The finance system allocates our capital – can it be used to solve this measurement problem? Or is it the cause of the problem, asks Nick Silver, in his book Finance, Society and Sustainability .Silver argues that the financial framework behind the Anglo-Saxon economies of the US and the UK in particular is the construct of flawed economic theories, which purport to efficiently allocate society’s capital. Instead, he says, the finance sector allocates savings and investment to maximise its own revenues, with a resulting collateral damage to the economy, society and the environment. Seeking mathematical proof of ESG concepts may be misguidedMathematical simplifications of real behaviour can be useful, but the dangers exist when they are taken too far and purport to emulate science in their immutability. The laws of physics are absolute through time and space, even if physicists seek further refinements to their precision and struggle to reconcile general relativity with quantum theory – the physics of the very large and the physics of the very small.Physics envy has created a misunderstanding of what can be achieved in economics. Economies may be modelled by ideas such as Adam Smith’s famous invisible hand of self-interest, but human beings are driven also by ideas of altruism, and by timescales that may often be way beyond the horizons of any individual life. Enjoying the beauty of a forest is something that we would like to believe our descendants would also be able to do. But any positive discount rate will attribute little value to such benefits that may occur 100, 200 or even 1,000 years into the future.Even ideas that form the basis of classical economics – such as the idea of a risk-free interest rate – were overturned by the global financial crisis when risk-free rates turned negative.  Can traditional economic measurements capture ESG principles?The financial framework is, as Silver describes, based around a few key theories, namely: the capital asset pricing model (CAPM), which postulates relationships between risk and return; the efficient market hypothesis, which argues that securities are usually fairly priced reflecting the information available; and the Black-Scholes option pricing model, the most widely used general model for pricing options.However, Silver argues, the financial system operates on a set of norms that equate all human values with financial value, and measures value as the market price. This is proving catastrophic for the economy, society and the planet.The idea that companies should only be run to maximise value for shareholders has been a cornerstone of modern finance. It is also now increasingly recognised as a pernicious, flawed idea that has encouraged behaviour that can be at the opposite extreme to what ESG principles should encourage.The philosophical debate as to whether management should run companies ‘to maximise shareholder value’ versus operating companies for the benefit of all stakeholders is essential to understanding how the principles of ESG should fit in.What should drive ESG investing should not be attempts to prove returns are higher but a reformulation of economic theory that recognises the real world inhabited by human beings, whose behaviour includes concepts such as altruism and time horizons that can extend many generations into the future.last_img read more

first_imgEmily Chew, global head of ESG research and integration at Manulife Investment Management and current chair of the Climate Action 100+ steering committee, said BlackRock was one of the most influential asset managers in the world and its coming on board “will bring even more heft” to investor engagement through the initiative.Launched in 2017, Climate Action 100+ is the world’s largest investor group working on climate change, counting more than 370 investors with more than $41trn in assets under management.Signatories commit to engage with companies to get them to take action to reduce greenhouse gas emissions “across the value chain”, implement a strong governance framework, and report in line with the recommendations of the Task Force on Climate-related Financial Disclosures.Stephanie Pfeifer, member of the initiative’s steering committee and CEO of the Institutional Investors Group on Climate Change, said: “With the world’s largest asset manager now joining Climate Action 100+, company boards should be under no illusion of the need to take action on climate change and reduce their emissions.”‘Not meaningful unless …’Others struck a more downbeat tone.Jérome Tagger, newly appointed CEO of Preventable Surprises, a think tank focussed on systemic environmental, social and governance risks, said BlackRock joining Climate Action 100+ was a “long overdue small step given the scale and urgency of the climate crisis”.It won’t be meaningful unless supported by a vastly improved proxy voting on climate disclosure and forceful collaborative stewardshipJérome Tagger, CEO of Preventable Surprises“It won’t be meaningful unless supported by a vastly improved proxy voting on climate disclosure and forceful collaborative stewardship,” he said. “We shouldn’t forget the many other global institutional managers such as Vanguard, State Street, Wellington, T Rowe Price or Nuveen who have yet to join the effort.”According to a report from ShareAction, a responsible investment campaign organisation, US fund managers block climate votes, with the 10 investors that are least supportive of voting for climate action all based in the US, with European investors more prepared to vote against management.BlackRock was identified as the third worst performer overall (6.7% of votes in favour of selected resolutions). ShareAction also noted that some members of Climate Action 100+ were not voting against management at some of their focus companies.Eli Kasargod-Staub, executive director of Majority Action, a non-profit shareholder advocacy organisation, said that in joining Climate Action 100+, BlackRock was “finally recognising that its go-it-alone approach has been counterproductive”.However, he called on CEO Larry Fink to commit the asset manager “to using their voting power to hold directors accountable at corporations that fail to align themselves to the goal of holding warming to 1.5°C”.Late last year InfluenceMap, a think tank, published analysis of large asset managers’ corporate engagement activity with respect to climate change and said only few were “strongly and consistently” engaging with companies about aligning their business models to meet the goals of the Paris Agreement, with BlackRock one of the laggards.‘Could help BlackRock shift’Thomas O’Neill, research director of InfluenceMap, said joining CA100+ was “a positive step that could help BlackRock shift towards a position where it is willing to change the business models and lobbying activities of companies”.BlackRock has previously responded to criticism of its voting by saying that stewardship was about more than voting, and that it has engaged with many more companies on climate risk than the number of shareholder proposals that came to the vote.It has also said it was willing to be patient with companies when its engagement “affirms they are working to address our concerns”. Where it did not see progress through engagement, it would generally express its concern by voting against directors or abstaining.In its 2019 investment stewardship report, BlackRock said it was often asked to join various multi-stakeholder initiatives, but that it only joined external groups “when we believe that collective action can significantly augment our direct engagements”.“We try to avoid initiatives that duplicate our own efforts or that may cause confusion for issuers,” it said.When investors sign up to Climate Action 100+ they nominate which companies they would like to engage with and in what capacity – as lead or supporting investor.There are 161 companies on the initiative’s focus list: 100 “systemically important” emitters of greenhouse gases, and 61 that are considered to have “a significant opportunity to drive the clean energy transition”.Equinor, Glencore and Shell are among companies investors have engaged as part of Climate Action 100+. Shell, for example, committed to setting short-term climate targets and link them to executive pay following engagement with the Climate Action 100+ investors. BlackRock has joined investor engagement initiative Climate Action 100+, with reactions to the heavily scrutinised asset manager’s move conveying different interpretations of what the impact might be.BlackRock has frequently been accused of not bringing enough pressure to bear on companies in relation to climate change, with the criticism often aimed at its shareholder voting.A spokesperson for the $6.8trn (€6.1trn) asset manager said joining Climate Action 100+ was “a natural progression of the work our investment stewardship team has done to date.”“We believe evidence of the impact of climate risk on investment portfolios is building rapidly and we are accelerating our engagement with companies on this critical issue.”last_img read more

first_imgHe also expressed pride in the SRB’s collective achievements, writing that among other things, the Single Resolution Fund had been built up to €33bn within a short period; that more than 350 people had been hired and a €55bn transitional period safety net had been constructed.Viherkenttä’s move can also be seen as a return, in that he worked in academia for the first 10 years following his graduation, both as a researcher and lecturer on tax law at the University of Helsinki.Following that, he worked in several different roles before coming to VER in 2015.Viherkenttä spent four years as a judge at Finland’s Supreme Administrative Court and eight as deputy CEO of Finland’s largest pension fund, Keva. The State Pension Fund of Finland — Valtion Eläkerahasto (VER) — is losing its chief executive officer of the last five years, but regaining its former chief who has 12 years of experience leading the €20bn fund.Timo Viherkenttä confirmed to IPE he is leaving the fund, which acts as a buffer fund for the central government’s staff pension obligations, at the end of February to take up a teaching and research post at Aalto University, which is located in Espoo in Finland’s capital region.At that point Timo Löyttyniemi, who in December ended his non-renewable five-year term as vice chair of The Single Resolution Board (SRB) in Brussels – the central resolution authority within the European Union’s Banking Union (BU) – will return to run VER five years after leaving the Helsinki-based job he held for 12 years.After leaving his post in Belgium last month, Löyttyniemi said in a post on LinkedIn he planned to take a “nice long break with the family”.last_img read more

first_imgIn addition to delays in reporting deaths where the deceased had tested positive, deaths where COVID-19 was a contributory factor could also have been omitted from the figures, according to the company.Baxter said this is confirmed by data from the Office for National Statistics (ONS) for deaths registered up to 2 May 2020, which also include those where COVID-19 is mentioned “somewhere” on the death certificate.Club Vita analysis suggests that including these deaths brings the true toll for deaths directly related to COVID-19 to around 40,000 as at that date.In addition, Baxter said: “Since early April we have also seen unseasonably high levels of deaths which make no mention of COVID-19 – around 3,000 higher each week than usual for this time of year.”He concluded: “Putting all this together means that the combined direct and indirect loss of life from COVID-19 may now be 60,000 – double the official number.”Charlie Finch, partner at LCP, said: “It is too early yet to draw firm conclusions on the impact that higher COVID-19 related mortality may have on insurer pricing and pension scheme finances.However, current projections for potential excess deaths in the UK suggest the impact will not be significant, with the bigger impact being swings in financial markets.”Stephen Caine, pensions consultant at Willis Towers Watson, said: “The actuarial profession’s mortality committee, the CMI, estimates that the increase in total death numbers in the UK due to the pandemic is likely to have already exceeded 60,000. However, even if the final toll were much worse – for example 300,000 – the impact on the funding level of a defined benefit (DB) scheme, with a membership roughly representative of the UK demographic, may be just 0.5%.”The impact is smaller than might be expected given the fact that most deaths would be for older members and retirees in such a pension scheme. This would cut short benefit income streams and so reduce pension liabilities, he acknowledged.According to Caine, the most material effect of COVID-19 for pension schemes will be its long-term impact on future mortality rates, which is, however, harder to gauge.He said: “Periods of austerity can correlate with a slowdown in life expectancy improvements – for instance, such a slowdown has been taking place since 2011. So if the COVID-19 crisis is followed by a deep recession, we could see a continued slowdown in life expectancy improvement which could take 2% off pension scheme liabilities, but this would emerge over time rather than happen immediately.”Conversely, Caine also recognised that lifestyle and environmental changes occurring under lockdown – such as minimal use of cars and cleaner air – could be responsible for improving longevity which may offset the recessionary effect.He concluded: “The big question is where long-term life expectancy is going to: this creates a lot more uncertainty for trustees and sponsors in computing the three-yearly valuation and long-term planning.”Looking for IPE’s latest magazine? Read the digital edition here. The UK’s death toll so far from COVID-19 could be double the official figures, but the impact on pension funds is likely to be far less significant than potential changes in long-term mortality rates associated with the virus, consultants have said.According to analysis by Club Vita, the provider of longevity risk informatics, the actual UK mortality so far from COVID-19 is likely to be around 60,000 – double the official tally.The company said the discrepancy with figures published by the UK government is being caused by delays and omissions in compiling the totals.Steven Baxter, head of innovation at Club Vita, said: “Despite the [government] briefings now including both hospital deaths and deaths in the community where the individual has tested positive for COVID-19, under-reporting is still an issue.”last_img read more