What is PensionMetrics?
PensionMetrics is a highly flexible stochastic modelling tool that addresses all aspects of pension plan design, retirement planning and lifetime wealth management. It covers all relevant risk factors, including economic risks, investment risks and longevity risks, and can also be used to carry out stochastic scenario analyses. The PensionMetrics model is reliable (as it is based on a large number of simulation trials) and also very fast, so real-world calculation times are almost instantaneous.
For a given set of risk factors, a stochastic simulation model determines the likely outcomes of the pension in retirement for different contribution rates, investment strategies and retirement ages. The model takes account of all relevant member characteristics including age, gender, occupation, prospective retirement age, other savings and investments, and anticipated longevity. The model can also take account factors relating to the plan member’s partner, such as age and occupation.
The key quantifiable risk factors in the model are:
Our clients include UK pension providers and consultants, UK public sector and regulatory agencies, and supranational institutions.
What makes PensionMetrics unique?
Why is PensionMetrics needed?
When designing a pension plan, it is important to compare the range of outcomes from different investment strategies. PensionMetrics provides a powerful tool for doing this and has a wide range of investment strategies built in: it has a lot of modelling flexibility. PensionMetrics measures outcomes in terms of fund size, replacement ratios and retirement consumption at different ages: it also has a lot of flexibility over how outcomes are illustrated.
PensionMetrics is also needed to demonstrate due diligence and best practice in the new world of Defined Ambition, auto-enrolment, the FCA's compliance requirements, and the pension flexibilities introduced by the 2014 Budget. These include accountability and transparency. We can think of due diligence as playing the same role in defined contribution schemes as solvency requirements play in defined benefit schemes. It should therefore be taken as seriously.
PensionMetrics can be tailor-made to fit your needs
There are a number of versions of the software available, depending on the user’s requirements.
Bespoke versions can also be developed to meet a client’s specific needs. The client can: