WiredGov Newswire (news from other organisations)
FRC: AS TM1 assumptions to remain unchanged
The FRC has conducted a review of the assumptions set within Actuarial Standard Technical Memorandum 1 (AS TM1) that are mandated for use in the annual Statutory Money Purchase Illustrations (SMPIs) received by people saving for retirement in defined contribution pension plans.
Each year there are over 30 million SMPIs produced in respect of these defined contribution plans.
We concluded that no change will be made to the assumptions and that the current version (V 4.2) will remain in force for SMPIs produced in the year beginning 6 April 2020. The main reasons for this conclusion are:
- The existing assumptions remain within a reasonable range so that change is not required urgently and there is value in consistency from year to year.
- The Pensions Dashboard has the support of industry and government. It is progressing and is intended to bring together all pension rights of each person in one place. This has the potential to revolutionise the way that projections are performed and presented in ways that are difficult to predict currently.
- The Continuous Mortality Investigation (CMI) is anticipating that next year they will issue a new base table for mortality and are looking to increase the flexibility available to users of their mortality tables. It is uncertain what impact this may have on the annuity market in practice.
- The UK's EU exit continues to remain a source of uncertainty to economic conditions and makes economic and fiscal prediction more difficult and potentially more volatile.
- Pensions Freedoms have fundamentally impacted the nature of pensions saving. Annuities are currently much less popular than previously (partially because of the high cost associated with them in low interest times and partially because Pensions Freedoms allow people access to their funds in more immediate ways). The annuity market has contracted but it is too uncertain to know whether annuities will become popular once more if and when fixed interest yields rise.
Given these initiatives and uncertainties it was concluded that now is not the time to make changes to the AS TM1 assumptions.
As such the current version of AS TM1 (version 4.2) will remain in force until further notice. However, as the above initiatives progress, it will be important for their impact to be reflected in subsequent versions of the pension projection assumptions.
The FRC has responsibility to set and maintain the assumptions used to produce the Statutory Money Purchase Illustrations (SMPIs) sent annually to individuals who have Defined Contribution (DC) pension plans.
To meet this responsibility FRC reviews the assumptions in AS TM1 which governs these illustrations against the background of current and anticipated economic and demographic experience. In addition, we monitor those assumptions in which providers have a degree of flexibility (for example the choice of accumulation rates to be used in the projection).
For more information contact firstname.lastname@example.org
Latest News from
WiredGov Newswire (news from other organisations)
UK Space Agency: New space mission to chase down comet will be led by UK scientists20/06/2019 16:05:00
A new mission called Comet Interceptor, which was proposed by the UK, has been targeted for launch by the European Space Agency in 2028.
CBI: Manufacturing output slowed to a halt in the three months to June20/06/2019 15:15:15
Manufacturing output slowed to a halt in the three months to June, marking the slowest growth since April 2016, according to the latest CBI Industrial Trends Survey.
Audit Scotland - More leadership needed to achieve Scotland’s digital ambitions20/06/2019 14:40:00
The Scottish Government needs to show greater strategic leadership across the public sector to achieve its digital ambitions, says the spending watchdog.
LGA responds to inspection of fire and rescue services20/06/2019 13:40:00
Cllr Ian Stephens, Chair of the Local Government Association’s Fire Services Management Committee, which represents 48 fire and rescue authorities in England and Wales, responds to the second tranche of a national report on fire and rescue services by Her Majesty’s Inspectorate of Constabulary and Fire and Rescue Services.
Unicef UK calls on the international community to support vulnerable refugee children20/06/2019 12:40:00
Unicef UK responds to UNHCR Global Trends Report which found that 70.8 million children, women and men were forcibly displaced at the close of 2018.
CBI responds to prompt payment measures20/06/2019 12:33:00
CBI yesterday responded to prompt payment measures.
Wales Audit Office - Unlawful action at Town Council20/06/2019 11:40:00
Failures in decision making and internal control at Town Council results in loss of £234,000
LGA responds to calls to repeal Vagrancy Act20/06/2019 10:40:00
Cllr Simon Blackburn, Chair of the Local Government Association’s Safer and Stronger Communities Board, responded to a campaign by Crisis to repeal the Vagrancy Act
Citizens Advice responds to a new scheme to help people in debt20/06/2019 09:40:00
Yesterday the government has announced a new ‘breathing space’ scheme which will protect people in debt for 60 days from interest, fees, charges and enforcement, as well as providing statutory protections from creditors for people who have plans to repay their debts.
Law Commissions’ analysis of responses to automated vehicle consultation points to the way forward19/06/2019 15:15:15
The Government could begin work to establish a safety assurance scheme, building on its existing work in the Code of Practice, to allow for the commercial deployment of highly automated driving systems, the Law Commission of England and Wales and the Scottish Law Commission have announced today.