The BAS has today issued a call for comments on possible changes to rules on how calculations should be carried out for pension projections in statutory annual statements for money purchase pension schemes.

The consultation paper considers whether the current rules could be enhanced in order to help pension scheme members better understand their benefit statements and thus improve their retirement savings plans. The paper also considers whether the assumptions used in pension projections should be reviewed. These assumptions include the maximum rate at which funds can be assumed to accumulate (currently 7% p.a.).

Commenting on the consultation, Jim Sutcliffe, Chairman of the BAS, said:

“Several million people receive statutory money purchase illustrations every year. When the National Employment Savings Trust comes into force in 2012 the number will be even greater. It is vital that these illustrations are understandable as they contain important information about how much people have already saved towards their pensions and what they might receive at retirement.”

The consultation paper is available at http://www.frc.org.uk/bas/publications/pub2244.html.

1. Since 6 April 2003, members of certain money purchase pension arrangements must be provided with Statutory Money Purchase Illustrations (SMPIs). SMPIs are produced in accordance with Technical Memorandum 1: Statutory Money Purchase Illustrations (TM1), which is issued by the Board for Actuarial Standards (BAS). The BAS reviews TM1 regularly.
2. The Financial Reporting Council (FRC) is the UK’s independent regulator responsible for promoting confidence in corporate governance and reporting. Its functions are exercised principally by its operating bodies (the Accounting Standards Board, the Auditing Practices Board, the Board for Actuarial Standards, the Financial Reporting Review Panel, the Professional Oversight Board and the Accountancy and Actuarial Discipline Board) and by the FRC Board. The Committee on Corporate Governance assists the Board in its work on corporate governance.
3. The Board for Actuarial Standards has a primary objective of promoting competence and transparency of actuarial practice by establishing and improving actuarial technical standards and ensuring that they are coherent, consistent and comprehensive.
4. All media enquiries should be addressed to Louise Pryor, Director of the Board for Actuarial Standards, 020 7492 2328 or email at l.pryor@frc.org.uk.