Mortality moves
28 Mar 08
The Pensions Regulator has set out a new approach to mortality assumptions
The Pensions Regulator has set out a new approach to mortality assumptions in a draft statement on the regulation of defined benefit pension schemes.
The modified approach, developed in the light of emerging evidence, particularly over the past year, states that in the context of recovery plans submitted to the regulator:
- Mortality assumptions that appear to be weaker than the long cohort assumption will attract further scrutiny and dialogue with the trustees where appropriate;
- Assumptions that assume that the rate of improvement tends towards zero, and do not have some form of underpin, will also attract further scrutiny.
Chief executive Tony Hobman said: “Scheme members living longer adds to the cost of pensions and it is right that schemes recognise this.”
Both the amended approach and the guidance are subject to industry-wide consultation, which ends on 12 May 2008.
WIND-UP SPEED PLEA
Pension scheme trustees should ensure that that the key activities of winding up, or passage through the Pension Protection Fund (PPF) assessment period, are completed within no more than two years.
A joint consultation paper from the Pensions Regulator (TPR), the PPF, and the Department for Work and Pensions aims to speed up the winding up process. TPR has published accompanying guidance.