How to project trends in mortality after Covid-19: the CMI consultation
On 21 September the Continuous Mortality Investigation (CMI) published a consultation on a modification to its mortality projections model to allow for the effect of the Covid-19 pandemic. All sounds very technical, so what does it mean for Defined Benefit (DB) pension schemes?
DB pension schemes in the UK use the CMI model to make assumptions about how life expectancy will change in the future. This affects all aspects of pension scheme funding, including funding valuations, company accounting disclosures and transfer values for members. A change to the model could mean deficits growing or shrinking, and good or bad news for members transferring their pension to another scheme. Understanding how the model may change is key for trustees and sponsors to anticipate upcoming shocks to their scheme’s financial position.