FRC publishes consultation paper on amending AS TM1 for revised disclosure regulations

News types: Consultation Announcement

Published: 15 November 2013

PN 098

The Financial Reporting Council (FRC) is today publishing a fast-track consultation paper on proposed amendments to Actuarial Standard Technical Memorandum 1 (AS TM1) to reflect changes introduced by new disclosure regulations which affect Statutory Money Purchase Illustrations (SMPIs). The amendments to the disclosure regulations and AS TM1 will mean that, from 6 April 2014, pension providers can present more personalised illustrations to pension scheme members in their annual statements.

The FRC’s consultation follows regulations published on 31 October 2013 which consolidate and amend some of the requirements for disclosure of information to pension scheme members introducing additional options. The amendments include changes to the information shown in SMPIs.  Accordingly, the FRC proposes changes to its standard AS TM1 to enable providers to present illustrations which allow:

  • for cash lump sums to be taken out prior to the calculation of the illustrated pension;

  • varying percentages of dependants’ pension to be assumed; and

  • different levels of pension increases to be assumed.

The consultation period ends on 13 December 2013. A copy of the consultation paper can be downloaded here.

Notes to editors:

  1. The FRC is responsible for promoting high quality corporate governance and reporting to foster investment. We set the UK Corporate Governance and Stewardship Codes as well as UK standards for accounting, auditing and actuarial work. We represent UK interests in international standard-setting. We also monitor and take action to promote the quality of corporate reporting and auditing. We operate independent disciplinary arrangements for accountants and actuaries; and oversee the regulatory activities of the accountancy and actuarial professional bodies.  

  2. 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 the Disclosure Regulations issued by the Department for Work and Pensions. Actuarial Standard Technical Memorandum 1: Statutory Money Purchase Illustrations (AS TM1), which is issued by the FRC, sets out the methods and assumptions to be used in producing SMPIs. The FRC reviews AS TM1 regularly.  

  3. The closing date for responses to the consultation is 13 December 2013.

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