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Financial services workers have plenty of time to spend their legendary bonuses: they are the employees who live the longest, a new analysis has suggested.
Other sectors where workers can look forward to a lengthy retirement include aerospace and defence, insurance and telecoms. However, those employed by tobacco, construction, oil and gas and mining and metals companies can expect considerably fewer years on the golf course. A new analysis by Pension Capital Strategies, the pensions consultancy, shows sector by sector the assumptions that companies make on how long their workers will live after retiring.
The information has become available because auditors are putting pressure on companies to reveal in annual reports the mortality assumptions used to set payments for their final salary pension schemes.
Peter Redhead, managing director of PCS, said: “If you go back 18 months there were only two or three FTSE 100 companies that published information on mortality assumptions. Now, 61 companies have made disclosures and we’d expect that in the accounts for the year to December 31, 2006, which are coming out now, almost all will make some kind of disclosure.”
Fund managers, stock brokers and venture capitalists will live on average 26.2 years after their 60th birthday, according to PCS’s study of the disclosures made so far. At the bottom of the table, tobacco workers will have on average 21.6 years.
Although some variations in the assumptions used can be explained by the social classes and types of work involved in different sectors, Mr Redhead said that other variations were more difficult to pinpoint.
He said that although actuaries advised on the assumptions used, the final figures were set by the company. “Some companies may have greater incentive than others to be more or less prudent, depending on what their deficit is,” he said.
At the top of the scale, companies are using assumptions that are in line with advice from the Continuous Mortality Investigation, which supplies the mortality information used by actuaries. The CMI estimates that a man turning 60 will live on average a further 26.5 years.
However, the companies’ estimates are still far less optimistic than those used by insurers who sell annuities, which are closer to 28 years after age 60.
Rocketing longevity rates have sent pension scheme deficits soaring. On average, Britons add another two years to their lifespan every decade, or gain an extra five hours every day. But Mr Redhead said that a reduction in smoking or changes in diet could easily upset that trend, rendering assumptions meaningless.
Last August the CMI admitted that it was too difficult to estimate how long human beings might live, and said that it would no longer offer a single set of predictions. Recent CMI tables, called the 00 Series, looked at the improvement in death rates between 1999 and 2002.
The previous tables, the 92 Series, were based on death rates for 1991 to 1994. The 00 Series showed that 12.85 men in every 1,000 aged 65 would die that year, while the 92 Series put the figure at 18.12, so mortality rates had improved by 29 per cent.
Looking ahead - Number of years men can expect to live after 60
Financial Services 26.2
Aerospace and Defence 26.1
Insurance 25.3
Telecoms 25.2
Media 25.0
Health Care and Pharmaceuticals 24.6
Banks 24.4
Chemicals 24.0
Travel and Leisure 23.8
Retail 23.6
Household, Personal and Leisure Goods 23.6
Food and Beverages 23.5
Utilities 23.3
Support Services and Industrials 23.3
Mining and Metals 23.2
Oil and Gas 23.0
Construction and Materials 22.4
Tobacco 21.6
To read the full article please see The Times Online