PPF launches consultation on updated valuation assumptions to reflect bulk annuity market developments

The Pension Protection Fund (PPF) has today launched a consultation on proposed changes to the assumptions used for valuations under sections 143 and 179 of the Pensions Act 2004.

The assumptions are used to estimate the cost of securing PPF levels of compensation with an insurer and underpin section 143 valuations conducted during PPF assessment periods, as well as section 179 valuations used for a variety of purposes including, historically, PPF levy calculations. 

The consultation follows a review of bulk annuity market pricing, which found pricing had become more competitive since the PPF’s last detailed review. The main proposed changes cover discount rates and longevity assumptions. The proposed updates are intended to keep the assumptions aligned with current buy-out pricing and would generally reduce estimated scheme liabilities under the valuation bases. 

The PPF regularly reviews market developments to ensure its assumptions remain appropriate. The current standard assumptions were set after a 2023 review, with guidance updated in 2024 to allow bespoke adjustments to the section 143 discount rate in limited circumstances. 

Aaron Pang, Acting Chief Actuary at the Pension Protection Fund, said: 

"We regularly review our valuation assumptions to ensure they remain appropriately aligned with the bulk annuity market and continue to meet the objectives set out in legislation. 

Our latest review suggests that market pricing has moved since the assumptions were last comprehensively updated. The proposals in this consultation are intended to reflect those developments while continuing to provide a practical and proportionate framework for valuations. 

We encourage trustees, actuaries, advisers, insurers and other stakeholders to review the proposals and share their views." 

The consultation document is available in the PPF's valuation guidance section on the website: https://www.ppf.co.uk/trustees-advisers/valuation-guidance/new-consultation-documents

The consultation closes at 5pm on 16 September 2026. Subject to the outcome of the consultation, the PPF intends to publish its final decision in October 2026. The proposals currently envisage the revised assumptions applying to valuations with an effective date on or after 31 May 2026.  

Responses can be submitted by email to:  [email protected]. 
 

--ENDS--

Notes to Editors  

• Section 143 valuations are used to assess whether a pension scheme in a PPF assessment period has sufficient assets to secure benefits at least equal to PPF compensation levels outside the PPF.  
• Section 179 of the Pensions Act 2004 requires every eligible scheme to undertake a Pension Protection Fund valuation to establish the level of the scheme’s assets and liabilities. These valuations are used in the PPF’s Purple Book and 7800 Index publications, as well as the PPF’s internal risk modelling, and up until recently were used in the PPF conventional levy calculations. Section 179 assumptions are currently also used to determine alternative covenant scheme levies and the default superfund wind-up trigger.

About the PPF  
 
The Pension Protection Fund (PPF) is a public corporation, set up by the Pensions Act 2004, and has been protecting members of eligible defined benefit (DB) pension schemes across the UK since 2005.  

The PPF is run by an independent Board and accountable to Parliament through the Secretary of State for the Department for Work and Pensions. It protects 8.6 million members belonging to more than 4,800 pension schemes. If an employer collapses and its DB pension scheme cannot pay members what they were promised, the PPF pays compensation for their lost pensions. The PPF is now funded principally through assets from transferring schemes, recoveries, and investment returns. For its first 20 years it collected a compulsory levy from all DB schemes.  

The PPF is one of the UK’s largest asset owners with £31.5 billion of assets under management. It also administers the Fraud Compensation Fund (FCF), the Government’s Financial Assistance Scheme (FAS) and across both the PPF and FAS looks after over 420,000 members.