Actuarial assumptions meaning

In this issue: The Pensions Regulator Members and benefits Public sector pensions Daily and weekly news alerts Dates for your diary Trackers The Pensions Regulator TPR strengthens anti-fraud initiatives to combat pension scams In a new blog post, The Pensions Regulator (TPR) details upgrades to its anti-scam work, prioritising richer intelligence gathering and closer cross-agency cooperation. Through the multi-million-pound ScamSmart campaign with the Financial Conduct Authority (FCA), and creative moves such as the pension-scam storyline on BBC’s EastEnders, TPR has warned millions of savers about scam risks. Its Pledge to combat pension scams has likewise raised industry expectations, with schemes covering millions of members committing to stronger prevention steps. In concert with partners, TPR’s anti-fraud efforts span prevention, disruption and sanctions, underpinned by stronger legislation, the dismantling of fraudulent business models, prosecution of offenders, seizure of assets and the barring of trustees. By sharpening the national intelligence picture, TPR supports sound policy-making and swift, cost-effective action. To...

In this issue Scheme amendment Funding and investment Members and benefits Types of workplace pension schemes Public service pensions schemes and Fair Deal Daily and weekly news alerts Dates for your diary Trackers Scheme amendment Court of Appeal hears BBC’s appeal regarding fetter on amendment power protecting future benefits On 25 June 2024, counsel for the BBC told the Court of Appeal that the High Court’s conclusion—that the BBC cannot change its £19.8bn defined benefit BBC Pension Scheme to reduce future benefits—rests on a mistaken reading of the trust deeds supporting the Scheme. In 2023, the High Court had rejected the BBC’s case that a clause in the Scheme’s trust deed barring changes that harm members’ “interests” applies only to benefits already accrued. Appearing for the BBC, Michael Tennet KC argued the judge adopted a broad, generic sense of “interest” rather than one consistent with how the term is used elsewhere in the Scheme’s deeds,...

R (on the application of the British Medical Association) v His Majesty’s Treasury and another; R (on the application of The Fire Brigades Union and others) v His Majesty’s Treasury and another [2024] EWCA Civ 355 What are the practical implications of this case? Barring any further appeal, the Court of Appeal’s ruling places the McCloud Remedy’s costs on present scheme members, in the same way as other valuation components tied to member profiles (for example life expectancy and pay growth), rather than on scheme employers. Employers, together with the Exchequer, continue to shoulder variability from financial and technical assumptions, such as the discount rate and actuarial methods. Unsurprisingly, members are unlikely to view this favourably, particularly where it can fairly be said that the government’s own failure to avoid discriminatory treatment when setting up the new public sector pension arrangements gave rise to the McCloud Remedy in the first place. Nevertheless, the outcome aligns with the way the Remedy has been constructed and with the policy context...

THIS PRACTICE NOTE APPLIES IN RELATION TO DEFINED BENEFIT LIABILITIES How defined benefit (DB) liabilities ought to be assessed depends on a number of factors, in particular: the valuation approach to be adopted. Common exercises undertaken comprise the following: scheme-specific funding valuations as required under Part 3 of the Pensions Act 2004 (PeA 2004) solvency (or buy-out) valuations as required by the Occupational Pension Scheme (Scheme Funding) Regulations 2005, SI 2005/337, reg 7 valuations required by the PeA 2004, ss 143 and 179 (often described respectively as s 143 valuations and s 179 valuations) neutral estimates to meet the requirements of Technical Actuarial Standard 300 (Pensions) cash equivalent transfer values (CETV) as specified under the Occupational Pension Schemes (Transfer Values) Regulations 1996, SI 1996/1847 IAS19 and UK GAAP valuations whether the liabilities under review concern past service or future service, as distinct categories This Practice Note sets...

This practice guidance specifically concerns trust-based workplace pension schemes offering defined benefits Statutory requirement for actuarial funding valuations Trustees of private‑sector defined benefit (DB) workplace pension schemes that are registered with HMRC must, by law, carry out actuarial funding valuations no less than once every three years. The same obligation extends to any arrangement delivering defined contribution benefits where a DB guarantee underpins them. Moreover, schemes’ trust deeds and rules frequently embed an equivalent statutory requirement for actuarial funding valuations as standard practice...

This Practice Note outlines how Duxbury calculations are constructed and applied in practice to the assessment and calculation of capitalised spousal or civil partner maintenance/periodical payments within financial remedy proceedings, setting out the underlying assumptions, the limitations, and the circumstances in which such calculations are suitable and practically appropriate. It also reviews the courts’ general approach to rates of return. The basis of Duxbury calculations A Duxbury calculation was originally conceived to determine, in substance, the capital sum required to fund a fixed-rate periodical payment for the remainder of the recipient’s life, that is, their actuarial life expectancy as projected. In November 2024, the Duxbury Working Group, which is self-selected, published its final report (following a provisional report in October 2024) addressing earlier criticisms and advancing proposals ‘to banish outdated concepts and generally to modernise the approach’, while confirming that ‘it will be a matter for the courts whether to adopt the recommendations’. The Duxbury calculations are available via At a Glance 2025–2026...