Pensions - Articles - MUMS improves DB valuation process

 The MUMS service improves the DB pension valuation process by using actual health data of scheme members instead of proxies or broad-brush adjustments when setting key demographic assumptions.

 The service started in 2013 with a few small schemes and only two pension consultants. Over 2014 and 2015 the sister service Medical Underwriting Bulk Annuities (MUBA) took precedence and grew at great rate with 1.2 B of pension liabilities assessed.

 Andrew Gething – Managing Director of MorganAsh “In 2013 we worked with just 2 pension consultancies, but now we are actively working with 8 of them on MUMS projects across the country.”

 “This approach is consistent with The Pensions Regulator’s desire for trustees to use evidence based assumptions in the funding of pension schemes.”

 “While initially we thought that MUMS service would be attractive for smaller schemes where there were greater concentration risks and potential variation from standard postcode model approaches. However, we have been pleasantly surprised with much larger schemes using the service, to better understand the mortality risks that they are facing.”

 Gerry Devenney – Principal at Punter Southall: “With pension schemes maturing quickly, a typically untapped source of data is the actual physical health and lifestyle of their pensioner population. The proven MorganAsh methodology fills this void and obviates the need for unnecessary margins of prudence to let trustees and sponsors arrive at a more realistic estimate. of their liabilities. This can result in material and welcome cash flow savings for scheme sponsors.”