Market consistent capital value (MCCV) meaning

A method of valuing a pension scheme’s promised benefits by discounting expected cashflows using actuarial assumptions that reflect observable market prices at the valuation date. It is a descriptive actuarial term, not defined in legislation or case law. In practice, discount rates use gilt or swap yield curves; inflation is taken from index‑linked gilt or swap markets; other inputs mirror current pricing (for example, credit spreads, hedging costs and longevity expectations). The result approximates what the market would pay to assume the liabilities. Lawyers see MCCV in bulk annuity (buy‑in/buy‑out) transactions, wind‑up planning, section 75 employer debt estimates, funding negotiations and corporate deals requiring market‑based pension values. It differs from statutory funding: in the UK, technical provisions under the Pensions Act 2004 and the Pensions Regulator’s code and guidance allow prudent assumptions that may not be market‑consistent; in Ireland, the minimum funding standard uses prescribed assumptions. MCCV is therefore chiefly a pricing and decision‑making benchmark rather than a statutory measure. Usage and meaning are broadly consistent across England & Wales, Scotland, Northern Ireland and Ireland.