Statutory money purchase illustrations meaning

Statutory money purchase illustrations (SMPIs) are the annual projections given to members of defined contribution (DC) pension arrangements, showing the current fund value and an estimated retirement income at the member’s selected/normal retirement age, expressed in today’s money. In the UK, SMPIs are required for occupational DC schemes under the Occupational and Personal Pension Schemes (Disclosure of Information) Regulations 2013 (with equivalent Northern Ireland regulations) and for stakeholder and personal pensions under FCA rules. The projection basis is prescribed by the Financial Reporting Council’s Actuarial Standard AS TM1 (most recently updated from 1 October 2023) to ensure consistent, comparable assumptions for investment growth, inflation, charges and decumulation. Trustees or providers must issue SMPIs at least annually to active and deferred members and use the same basis for data supplied to pensions dashboards. SMPIs are central to disclosure compliance, member communications and governance, and are frequently referenced in trustee minutes, scheme administration practices and regulatory audits. The term is used in legislation and regulatory rules, rather than case law. Usage is broadly consistent across England & Wales, Scotland and Northern Ireland. In Ireland, DC members receive an annual pension benefit statement with projections under IORP II and Pensions Authority guidance; the concept is...