Businesses could significantly cut the cost of their pension bill by carrying out a life expectancy review of members, according to LEBC Group.

The company, based in Regent Road, Leicester, has announced it helped broadcaster STV cut £5 million off its pension bill.

The 12-month review, which saw LEBC contacting the scheme's 800 pensioners and 200 deferred members, secured strong support, with some 66 per cent participating in the review.

By understanding members' life expectancies, the scheme was able to apply a meaningful mortality assumption in place of national averages.

Nick Flynn, longevity director at LEBC, said: "This ends the guessing game around scheme mortality by actually establishing the health of the membership.

"It benchmarks those individuals against the enhanced annuity underwriters and providers and confines today's postcode-based approach to history. Ultimately, this provides actuaries with a more accurate base of evidence from which to base future assumptions."

This review has seen a reversal of the annuity rate in much the same way as if a person retiring in poor health would receive a higher annuity. It effectively reverses annuity rates to create a mark to market prices, which can be used to work out the specific life expectancy of the membership.