The Pension Protection Fund (PPF) has published a consultation document proposing changes to the actuarial assumptions used in s179 and s143 valuations.
By law, the PPF has to set its valuation assumptions to reflect pricing in the bulk annuity market.
- Section 143 valuations are used to determine whether a scheme should enter the PPF following an insolvency event.
- Section 179 valuations are used to calculate scheme underfunding to determine the risk-based pension protection levy that a scheme should pay.
The most significant proposed changes are:
- to move to the CMI_2016 model for mortality improvements, and
- to use slightly higher discount rates for certain tranches of benefit so that they can better reflect current pricing.
There would also be consequential changes to valuations carried out under sections 152, 156 and 158.
Responses to this consultation should be received by 21 September, 2018. The intention is that changes would be introduced from 1 November, 2018. Please submit any responses via e-mail to [email protected]