Pricing for spouse's benefits

A key pricing assumption for bulk buy-outs of defined-benefit pension schemes is the proportion of annuitants actually married. Most schemes provide dependent's pensions, but few schemes actually keep or record who is actually married. As a result, pricing a bulk scheme usually involves making a guess as to the proportion of lives with a dependent spouse. This is a material assumption, as spouse's benefits add around 10% to any annuity price, so each extra 10% in the proportion married will add 1% to the total price. In order to make this pricing assumption more scientific, Richards Consulting offers a bureau service which can identify marital status in around 70% of cases.

If you would like more details, please contact us