PTL Blog

Gertrude Grubbe and Longevity Risk

Posted by Richard Butcher on Dec 8, 2015, 9:38:39 AM


Here’s a story to think about next time you have an actuarial review of your defined benefit pension scheme...Gertrude Grubbe was borne in Blaine, Tennessee in 1909. Her life was tough but probably not untypical of the time or place. Not even her marriage was particularly unusual, although enough so to cause some local stir.

Gertrude was courted, from the age of 16, by John Janeway. John had been an officer in the US cavalry and was a veteran of the American civil war having fought as a Union soldier. When they married in 1927, her mother forbade them to wed any earlier, Gertrude was 18 and John 81. The civil war had ended some 44 years before Gertrude was even born.

The newlyweds lived their life together in a log cabin, in Blaine, until John died in 1937. He was 91 – a grand old age for those days. Gertrude lived on in that cabin for most of the rest of her life and she lived for just a little longer than her husband. She died, aged 94, in 2003.

So, you can see that (a) people can live an unusually long time compared to the average and (b) they can have young partners.

The second of these is often, but not always, mitigated, in UK pension schemes, by a clause permitting the reduction in young spouse’s pensions. The first is often completed unmitigated.

The interesting twist in this particular story is this. The Veterans Administration failed to mitigate either of these risks. John received a pension until he died – fully 72 years after the Civil War ended. It then continued, at $70 every other month, to Gertrude until she died – fully 138 years after the end of the war to which it related. I suspect that was an outcome the actuary of 1865 failed to predict.

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Topics: Defined Benefit

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