UK defined benefit (DB) pension schemes could halve their aggregate deficit with an alternative approach to longevity risk, according to PricewaterhouseCoopers (PwC).The accountancy and audit firm claimed scheme sponsors could save up to £30bn (€35bn) a year by addressing life expectancy of members differently. Future payouts factored into DB calculations – many of which will not fall due for decades- don’t need to be prefunded by holding assets today, it argued.PwC’s Skyval index, which monitors the funding positions of the UK’s pension schemes, estimated that the total shortfall across the sector was £470bn at the end of 2016.Raj Mody, PwC’s global head of pensions, said: “One particular challenge for pension fund trustees is forecasting future life expectancy for their members. This is notoriously difficult to predict. Because of that, and the requirement for trustees to be prudent when coming up with a target for funding purposes, they typically make an allowance for life expectancy to continue to improve a very long time into the future. “However, these pension payments are not yet a commitment – they are just a prudent expectation of what might unfold over the next few decades. Asking companies to stump up the cash over a short-term period, in case of that eventuality, seems over-prudent.”Instead, Mody argued that trustees could focus on funding shorter-term liabilities while keeping life expectancy developments under review.“They can react accordingly over time depending on emerging and continuing trends,” he added.Meanwhile, the chair of the environment and resource board of the Institute and Faculty of Actuaries (IFoA) has argued that current discount rates are not fit for purpose and called for actuaries to “modify [their] techniques” to respond to the challenge posed by climate change.Writing in the IFoA’s inaugural “inter-generational fairness” newsletter, which focused on climate change, Nico Aspinall said: “Climate change and related resource and environment issues are the predominant challenge of the 21st century and look set to damage capital and hamper growth.”Actuarial science is “well placed” to help society face up to this challenge, but “we will have to modify our techniques for the new environment”, he said.Aspinall said: “Use of positive discount rates is dominant at present, because it has always been true before, making the future essentially worthless and incentivising policymakers to kick the can of climate change mitigation down the road into the future, where it is assumed to be more affordable. “A change to negative discount rates will be shocking to many in the financial community, but would send out a signal in terms of the timeframe in which changes to our economy must be made.”Elsewhere, workers’ unions are in dispute with the government about its handling of the pension schemes for the nuclear sector.Workers for the Atomic Weapons Establishment (AWE) are striking in protest at the decision to close its DB scheme. Unite, one of the unions involved in discussions, said members want it to become part of the civil service pension scheme under the Ministry of Defence.A new defined contribution pension scheme is to be introduced for AWE employees, with worker contributions of 3-8% and employer contributions of 9-13%.The DB pension scheme was linked to former government operations that were privatised in the 1980s. AWE is now run by Lockheed Martin, Jacobs Engineering, and Serco. Unite claims the government made “iron-clad” promises to maintain benefits when AWE was privatised.Separately, unions are fighting a plan to change the Nuclear Decommissioning Authority’s (NDA) pension scheme from a final salary arrangement to career average.The government wants to bring the NDA’s scheme – the Combined Nuclear Pension Plan (CNPP) – in line with public sector schemes, which made a similar switch in 2014.The Prospect union argued that the CNPP was not a public sector pension fund and so should not be subject to such a change. It has also raised concerns about how the consultation regarding the change was conducted.Representatives of several unions met with UK energy minister Jesse Norman last week and “agreed to further discussions”, according to Prospect’s deputy general secretary Dai Hudd.