AS TM1 Survey Results
29 September 2017
Legislation requires providers to issue a Statutory Money Purchase Illustration (SMPI) in respect of each defined contribution pension policy or arrangement to each policy holder or scheme member. The Financial Reporting Council has responsibility for setting and maintaining the framework within which these illustrations of projected retirement income are made.
Since 2012 the FRC has undertaken an annual survey of the accumulation rates used by providers to make the projections of funds to retirement. We do this to check market consistency with the underlying principles of the actuarial standard that sets the framework (AS TM1).
In 2017 we received responses from 19 providers who collectively issue over 24 million SMPIs. Approximately 62% of these statements were issued to individuals with contract based arrangements.
The results showed that accumulation rates use for 2017 illustrations were lower than used in 2016. The decrease from 2016 rates was on average approximately 50-60 bps for fixed interest and cash funds and around 30bps for equity funds.
More details can be seen in the survey report.