FRC concludes no changes needed to AS TM1
News types: Codes and Standards Announcements, Generic Announcement
Published: 30 January 2023
The Financial Reporting Council (FRC) has conducted a review of assumptions under Actuarial Standard Technical Memorandum 1 (AS TM1) and has determined that no changes are currently needed.
AS TM1 sets out the required approach for producing the annual Statutory Money Purchase Illustrations (SMPIs) received by individuals saving for retirement in defined contribution pension plans. The FRC conducts an annual review of the appropriateness of assumptions used in AS TM1 and has concluded that the assumptions set out in AS TM1 v5.0 are still appropriate and will remain in force for SMPIs issued between 1 October 2023 and 5 April 2024.
Last year, the FRC carried out an extensive consultation on the content of AS TM1 v5.0. To ensure the accumulation rates and volatility group boundaries remain appropriate for application from October 2023, the FRC has now carried out an updated review of these assumptions based on more recent market conditions.
Although the market conditions and outlook have changed since the previous review was conducted, considerable uncertainty remains. The FRC considers it appropriate, at this time, to retain the assumptions specified in AS TM1 v5.0 in the interest of maintaining stability of these assumptions over time.
A technical paper detailing the analysis supporting these conclusions is available.