XPS launch 'Scheme Vulnerability Analysis' to assess the impact of COVID-19 on pensioner life expectancy

XPS has expanded its Member Profiling offering with a new ‘ Scheme Vulnerability Analysis’ tool that helps schemes assess the possible impact of COVID-19 on their members’ life expectancy. The release follows the recent launch of the XPS COVID-19 Tracker, which allows pension schemes to understand the impact of the virus on mortality rates.

The Member Profiling Service uses a database compiled from publicly available sources to categorise members by postcode. This tool is already used to assess the relative wealth, health and mortality of members; identify those with financial dependants and their age difference; and determine the most effective ways for trustees to engage with members. The service now also identifies members’ vulnerability;  considering not just the implications of COVID-19 on life expectancy but also the susceptibility to the increased risk of scams the pandemic has created.

Trustees and employers’ understanding of the demographic characteristics of their members informs the assumptions they set for funding valuations, accounting disclosures and member option terms. Recent XPS’ profiling indicates that an analysis of members’ dependants alone can reduce a best estimate of liabilities by up to 5%.

Matt Plail, XPS’ Head of Member Profiling said “Pension schemes need help during this time of uncertainty to understand how vulnerable their scheme members are. This includes both the pandemic’s impact on mortality and susceptibility to the rise in pension scams. Vulnerability scores vary widely by scheme, so it is vital that pension schemes understand their own membership.  Our analysis not only looks at health, but also at the age, financial situations and digital vulnerabilities of members, to give schemes crucial information on whether they should undertake regular mortality screening or add protection for members exercising freedom and choice.”

XPS’s COVID-19 Tracker helps pension schemes understand the impact of COVD-19 on mortality rates in 2020 and understand the impact on various age groups such as age and sex. Total deaths to 12 June 2020 are projected to exceed those in the same period in 2019 by 70,000, of which 53,000 are expected to list COVID-19 on the death certificate