Actuarial valuation report meaning

A written report by the scheme actuary for the trustees of a defined benefit occupational pension scheme, explaining the results of the scheme’s actuarial valuation and advising on funding and contribution levels. In England & Wales, Scotland and Northern Ireland, the report is required at least every three years under Part 3 of the Pensions Act 2004 and the Occupational Pension Schemes (Scheme Funding) Regulations 2005. It must set out the value of the scheme’s technical provisions, the value of assets, the actuarial methods and assumptions used, and an estimate of the scheme’s solvency on a discontinuance or wind-up basis (often called the buy-out basis). Trustees use it to agree or review the statement of funding principles, the schedule of contributions and any recovery plan, and to engage with the Pensions Regulator. Annual funding updates are typically prepared between formal valuations. In Ireland, triennial actuarial valuations under the Pensions Act 1990 serve a similar function. The actuary’s report supports the Actuarial Funding Certificate and any funding proposal, assessing compliance with the statutory funding standard (and funding standard reserve, where applicable). Irish reports commonly include an estimated wind-up (discontinuance) position. Usage and purpose are broadly consistent across these jurisdictions.