A recent review of the valuation assumptions showed they need updating to align with pricing in the bulk annuity market.
The PPF is proposing several changes to bring these assumptions in line with the current market pricing:
- to update the mortality assumptions by moving to the latest “S3” series mortality tables and to use the CMI 2019 mortality projections model
- to change the discount rates for pensioners and non-pensioners post retirement
- to amend the calculation for wind-up expenses and slightly reduce pensioner and non-pensioner benefit installation/payment expenses
Lisa McCrory, PPF’s Chief Finance Officer and Chief Actuary said: “As part of a regular review, in December last year we held discussions with eight insurance companies about whether our current assumptions were dated and need reassessing.
“Based on these discussions, we’re now consulting on our proposals, to find out whether our updated assumptions strike the right balance with the bulk annuity market. We want to invite stakeholders to share their views on our proposals which will help shape future actuarial assumptions.”
The consultation document also covers changes to valuations carried out under sections 152, 156 and 158.
The online consultation ends at 5pm on Thursday 18 March 2021 and a summary of responses will be published on the PPF website.
The changes for valuations are set to be introduced on or after 1 May 2021.
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