Draft of revised Statutory Money Purchase Illustration Rules published
News types: Guidance, Publications
Published: 31 March 2011
BAS PN 40
The FRC’s Board for Actuarial Standards (BAS) has today published a proposed new draft of Technical Memorandum (TM1): Statutory Money Purchase Illustrations.
TM1 sets out the assumptions to be used in statutory pension illustrations. The BAS is proposing to update the mortality assumptions specified in TM1. It is also consulting on whether the maximum rate at which funds can be assumed to accumulate should be lowered. The maximum rate is currently 7% pa, which many have commented is too high.
The BAS has also revised the structure and content of TM1 to make it shorter and easier to understand.
Commenting on the consultation, Jim Sutcliffe, Chairman of the BAS, said:
“Statutory money purchase illustrations are important in helping individuals understand how much they have saved towards their pensions and what they might get in retirement. Illustrations are produced using assumptions specified in TM1 including the level of future investment returns and life expectancy. We are reviewing these two key assumptions. We would welcome views from stakeholders".
Notes to Editors
- Since 6 April 2003, members of certain money purchase pension arrangements must be provided with Statutory Money Purchase Illustrations (SMPIs). SMPIs are produced in accordance with Technical Memorandum 1: Statutory Money Purchase Illustrations(TM1), which is issued by the Board for Actuarial Standards (BAS). The BAS reviews TM1 regularly.
- The Financial Reporting Council (FRC) is the UK’s independent regulator responsible for promoting high quality corporate governance and reporting to foster investment.
- The Board for Actuarial Standards has a primary objective of promoting competence and transparency of actuarial practice by establishing and improving actuarial technical standards and ensuring that they are coherent, consistent and comprehensive.
Document created under a former FRC operating body.