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Feedback Statement and Impact Assessment - TAS 310 (July 2026)
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© The Financial Reporting Council Limited 2026
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1. Executive summary
Overview
1.1. In February 2026, the Financial Reporting Council (FRC) consulted on revisions to Technical Actuarial Standard (TAS) 310 v1.1. The proposed changes to TAS 310 were designed to reflect updates to the legislative framework around Collective Money Purchase (CMP) schemes and The Pensions Regulator's (TPR's) Code of Practice for trustees in respect of Unconnected Multiple Employer Schemes (UMESs).
1.2. The FRC received thirteen written responses, which were supplemented by stakeholder outreach discussions. All submissions were from industry participants with the majority provided by consultancies. This executive summary draws out the key areas of feedback and highlights the changes made to the exposure draft of TAS 310 v1.1 in response.
1.3. Most respondents were supportive of the overall direction of the proposed changes and of the additional provisions. In particular, they welcomed the focus on actuarial equivalence and on cross-subsidies between individual members and groups of members. There was also widespread support for TAS 310 v1.1 coming into effect from 31 July 2026, with a majority of respondents requesting publication of the new standard at the earliest opportunity as work on UMESs is already being carried out.
1.4. Some respondents highlighted practical considerations and requested the scope of the provisions be clarified or amended in a few areas. In finalising the standard, we have made amendments to address these points which are summarised in the rest of this section.
Rating factors
1.5. Some respondents expressed concern that the requirement in P7.1 to consider "all material rating factors" in the actuarial basis for determining actuarial equivalence was too wide-ranging and could potentially encompass any attribute that may lead to a different actuarial value being placed on benefits, whether practicably available or not.
1.6. In finalising the standard, we have amended P7.1 (and consequently P7.5) to "material rating factors”. This amendment makes the formatting consistent with other sections of TAS 310, reduces the risk of misinterpretation and limits practitioners' considerations to those rating factors which satisfy the Glossary definition of materiality. P7.1 does not specify quantification is required and our use of “consider” in the requirement allows practitioners to apply judgement as to the scope or depth of their deliberations about material rating factors and the resulting cross-subsidies. We have issued alongside TAS 310, guidance on the choice of rating factors, to support practitioners in following a proportionate approach in applying the standard.
Employer-level actuarial equivalence
1.7. A number of respondents commented that P7.2 and P7.6 should only apply when consideration is being given to the adoption of an employer-level method for determining actuarial equivalence.
1.8. It was our policy intention that additional consideration of cross-subsidies is only required in these circumstances. In finalising the standard, we have updated the provisions to make this clear.
Assumptions
1.9. Respondents generally agreed that the assumptions used to determine actuarially equivalent accrual rates should be the same as the valuation basis subject to specific exceptions. However, several respondents commented that the words “use assumptions which are the same as those that would be expected to be used for an actuarial valuation if carried out at that date" in P7.4 could be interpreted inconsistently.
1.10. In finalising the standard, we have amended the wording to "use assumptions which are the same as those used in the most recent actuarial valuation”. This clarifies our policy intention, as set out in the consultation paper, that there are only a limited number of situations where deviation from the valuation assumptions is permitted.
2. Introduction and background
2.1. The FRC is the UK's independent regulator responsible for issuing and maintaining technical actuarial standards. The FRC keeps the TASs and other actuarial standards under regular review.
2.2. Technical Actuarial Standard 310: Collective Money Purchase Pensions version 1.0 (TAS 310 v1.0 or 'the standard') was first issued in May 2024 and became effective for technical actuarial work completed on or after 30 September 2024.
2.3. Following updates to the legislative framework around CMP schemes and TPR's Code of Practice for trustees in respect of UMESs, CMP schemes with multiple unconnected employers will be able to apply for authorisation from 31 July 2026.
2.4. In February 2026, the FRC issued a consultation paper titled 'Technical Actuarial Standards for Collective Money Purchase Pensions' ('the consultation'), which included an exposure draft of the proposed revised standard TAS 310 v1.1. The consultation closed on 23 March 2026.
2.5. This paper provides a summary of the main areas of feedback received and sets out our response to this feedback, a summary of amendments to the exposure draft following the consultation, and the impact assessment.
2.6. The final version of TAS 310 v1.1 and supporting guidance is issued alongside this paper.
3. Explanation of key changes
3.1. The key changes to TAS 310, as set out in the consultation paper, relate to:
- the requirement for actuarial equivalence between the rate of benefit accrual and expected contributions in the new legislation for UMESs;
- consistency between actuarial factors in UMESs; and
- additional considerations for viability assessments for UMESS.
3.2. Following the consultation, in finalising the standard, we made a number of amendments to the exposure draft to address the feedback received. The amendments include:
- reformatting the requirements (and issuing supporting guidance) in relation to considering rating factors to be used when determining actuarial equivalence (question 1);
- clarifying that further consideration of expected cross-subsidies is required only where an employer-level approach to actuarial equivalence is being considered (question 2);
- clarifying the requirement for consistency between assumptions used for actuarial valuations and actuarial equivalence (question 4); and
- a small number of changes to other provisions and the Glossary of defined terms to add clarity to our policy intentions (questions 3 and 5 to 8).
3.3. We have also taken the opportunity to make a few further formatting changes to align with other sections of TAS 310 and reduce the risk of misinterpretation.
3.4. A full list of the amendments is set out in Appendix 1. TAS 310 v1.1 will be effective for all technical actuarial work in scope issued on or after 31 July 2026 to align with the new legislation.
4. Summary of responses
Responses to the public consultation
4.1. The FRC received thirteen written responses, eleven of which were not confidential and have been published on the FRC website. Table 1 summarises the number of (non-confidential) responses by respondent type. A list of respondents is set out in Appendix 2.
Table 1: written responses
| Category of Respondent | Number |
|---|---|
| Professional and industry bodies | 3 |
| Consultancies / professional service firms | 7 |
| Other | 1 |
| Total | 11 |
4.2. In addition, we held seven meetings with stakeholders during or after the consultation period. All of these stakeholders provided written responses.
4.3. In this section we summarise the main points made in written submissions and provide comment to explain our position.
Question 1: What are your views on the proposed provisions P7.1 and P7.5? Are there any specific rating factors (for example, age) that you think should or shouldn't be used in determining actuarial equivalence?
4.4. There were twelve responses to this question. Most respondents were supportive of the policy intention but commented that the phrase "all material rating factors" in P7.1a could lead to the provisions being onerous for practitioners to comply with. Respondents commented specifically on:
- the underlining of "all" and / or whether “all” is needed at all;
- “material” not being in bold despite being a defined term in the Glossary of defined terms; and / or
- the definition of "rating factors” being too wide-ranging and potentially encompassing any attribute that may lead to a different actuarial value being placed on benefits, whether practicably available or not.
4.5. Four respondents commented either that age should be mandated as a rating factor, or that the standard should set the expectation that the practitioner should consider age as a potential rating factor. However, three respondents commented that the standard should not specify which rating factors should be used.
4.6. Two respondents requested greater clarity on how frequently actuaries are expected to review and advise on the rating factors, to avoid actuaries interpreting the provision as needing to review them frequently.
4.7. One respondent suggested amending P7.5b to relate to "the expected material cross-subsidies" to better reflect the intent to avoid excessive cross-subsidies.
FRC response
4.8. In finalising the standard, we have amended P7.1a from “all material rating factors” to "material rating factors”. This amendment makes the formatting consistent with other sections of TAS 310, reduces the risk of misinterpretation and limits practitioners' considerations to those rating factors which satisfy the Glossary definition of materiality.
4.9. We acknowledge respondents concerns about P7.1 being too wide-ranging but highlight our use of "consider” in the requirement which allows practitioners to apply judgement as to the scope or depth of their deliberations about material rating factors and the resulting cross-subsidies. In particular, the requirements of P7.1 and P7.5 do not specify quantification is required, and there may be rating factors that the practitioner considers material but for which data is not currently available, and there may be significant obstacles to overcome to obtain the data. In those circumstances, the practitioner may choose to satisfy the requirements through a qualitative consideration and directional description of the potential cross-subsidy, sufficient to allow decision makers to consider if they require further analysis. We have issued alongside TAS 310 guidance on the choice of rating factors, to support practitioners in applying proportionality when complying with both P7.1 and P7.5, recognising that practice may evolve as more UMESs are developed.
4.10. As set out in paragraph 3.15 of the consultation paper, we do not consider it necessary to prescribe the use of age as a rating factor as, under P7.1 and P7.5, were there a reason not to allow for age, then it would be necessary for the practitioner to have both considered it and communicated this and the resulting cross-subsidy to the decision-makers. In finalising the standard, we have not made further amendments to mandate the use of age or any other specific rating factor, given that respondents have not presented compelling justification to do so and that specifying age as a factor would be inconsistent with a principles-based standard.
4.11. We do not consider it necessary to include provisions in TAS 310 on how frequently actuaries are expected to review, and advise on, the rating factors as we consider that this is adequately covered by TAS 100 v2 P2.3. The choice of rating factors is a material judgement which forms the basis of the accrual rates that will persist for the relevant period and, as such, P2.3 requires the practitioner to “highlight the circumstances that require that judgement to be reviewed to ensure that the implemented decision remains appropriate over that period."
4.12. In finalising the standard, we have amended P7.5b to relate to "the expected material cross-subsidies" as we agree that it is appropriate to focus on material cross-subsidies.
Question 2: What are your views on provisions P7.2 and P7.6? Are there any other issues relating to the choice of method that should be communicated to intended users.
4.13. There were eleven respondents to this question, of which five commented on the typographical error in P7.2 (the sixth word “of” was mistakenly included). Most respondents were supportive of including P7.2 and P7.6 in TAS 310, subject to some refinement of the wording as described below.
4.14. Five respondents commented that the additional provisions should only apply when consideration is being given to the adoption of an employer-level method for determining actuarial equivalence. A further two respondents commented that it was not necessary for the level of cross-subsidies to be quantified over and above the considerations made in P7.1.
4.15. Two respondents commented that the scope for making changes to the choice of method may be limited once scheme design decisions have been taken.
FRC response
4.16. We agree that if a member-level method is chosen then, by definition, there are no additional expected cross-subsidies for practitioners to consider and communicate over and above those in P7.1 and P7.5. Our intention was for P7.2 and P7.6 to only apply when consideration is being given to the adoption of an employer-level method and, in finalising the standard, we have amended the provisions to clarify this. This amendment also resolves the erroneous addition of 'of' mentioned above.
4.17. In relation to the potential frequency with which the choice of method may need to be revisited, the amended provision only applies if advice is given and the provision does not compel a more frequent review. If a change to the choice of method were being considered, it would be appropriate that P7.2 and P7.6 were followed.
Question 3: What are your views on provisions P7.3 and P7.7? What other considerations are there in the choice of relevant period?
4.18. There were twelve responses to this question. Most of the respondents broadly supported the approach of P7.3 and P7.7 but a majority suggested amendments to the wording of the provisions as set out below.
4.19. Three respondents commented that the list of points to consider and communicate should include the issues set out in paragraph 3.19 of the consultation paper relating to practical considerations on the choice of timing of the relevant period. Furthermore, in their response to question 1, three respondents commented that the provisions should require consideration and communication of the timing of the relevant period relative to the effective date for the calculations.
4.20. Around a third of those who responded suggested that P7.3c should be redrafted to require practitioners to consider the circumstances under which the accrual rate may need to be reviewed or reassessed, rather than change, during the relevant period.
4.21. Four respondents suggested that P7.3 should mandate that the relevant period should not exceed one year.
4.22. Four respondents suggested that the definition of accrual rate in the Glossary of defined terms should be amended to refer to pensionable salary rather than salary.
FRC response
4.23. Our policy intention, as set out in paragraph 3.19 of the consultation paper, was that consideration and communication of both the timing and the length of the relevant period is required. In finalising the standard, we have updated P7.3 and P7.7 to make it clear both are in the scope of these provisions. While we agree that there are practical issues that may be considered in setting the length of the relevant period, or any gap between the effective date for calculating accrual rates and the start of the relevant period, we consider that including a list of them in the standard is inconsistent with the principles-based nature of the TASs and, as such, we have not done so. In all areas of actuarial work, it is already expected that actuaries will allow for practical considerations.
4.24. Our policy intention in P7.3c was to capture consideration of circumstances where a change should be considered but acknowledge that the circumstances would not always lead to a change being made. We therefore agree that the suggested amendments to P7.3c would be clearer and have amended the wording in this provision accordingly. We have also updated P7.7c to follow the same wording.
4.25. Only a small number of respondents suggested a one-year limit to the relevant period being mandated in the standard, while the majority made no comment on setting a limit. We have therefore not introduced a specific limit and have instead retained the wording in P7.3b regarding considering the risk of cross-subsidies where the relevant period is over one year.
4.26. We agree that, where accrual rates are expressed as a fraction or percentage of a member's salary, this would be of pensionable salary. We have therefore amended the definition of accrual rate in the final version of the standard to reference pensionable salary instead of salary.
Question 4: What are your views on provisions P7.4 and P7.8? Are there any other areas where you expect a difference between the assumptions for actuarial equivalence and the actuarial valuation?
4.27. There were eleven responses to this question, and the responses indicated that there is broad support for including P7.4 and P7.8 in TAS 310, albeit with some suggested drafting changes.
4.28. Four respondents commented that the words “if carried out at that date" in P7.4 were unnecessary or did not add clarity, and three respondents raised practical issues with the drafting, particularly in relation to using updated assumptions that were in discussion with trustees but had not been finalised.
4.29. There were a small number of additional comments from respondents suggesting that P7.4 may be too restrictive, for example, the requirement to use assumptions which are “the same as" those that would be expected to be used for an actuarial valuation if carried out at that date.
4.30. Three respondents requested that “allowing for the different effective date” in P7.4b be amended to "allowing for a different effective date” given that some schemes may base their calculations on the effective date of the valuation. Two respondents also commented that it would be useful to define "effective date".
4.31. Four respondents commented that the expected resulting cross-subsidies referenced in P7.8 should be only those arising from differences in demographic assumptions (linking to P7.4a).
FRC response
4.32. We agree that the words “would be expected to be used for an actuarial valuation if carried out at that date” could be interpreted inconsistently. In particular, the term "would be expected to be used” was intended to allow a roll forward in time from the previous valuation as set out in paragraph 3.29 of the consultation paper, rather than requiring subjective judgement by the practitioner. As such, whilst our policy position remains unchanged, we have amended the wording in P7.4 to "use assumptions which are the same as those used in the most recent actuarial valuation". We have also made a consistent amendment to the wording in P7.4a from “demographic assumptions may differ from those expected to be used in the actuarial valuation” to “demographic assumptions may differ from those used in the most recent actuarial valuation".
4.33. We acknowledge that accrual rate advice might be given during the valuation process. We consider that the revised wording does not limit this. For example, the advice on the assumptions used to determine actuarially equivalent accrual rates may be contemporaneously presented on a preliminary basis pending the finalisation of the valuation and then confirmed once the valuation is completed.
4.34. Respondents generally agreed that the assumptions used to determine actuarially equivalent accrual rates should be the same as the valuation basis subject to specific exceptions. As we noted in paragraphs 3.27 to 3.29 of the consultation paper, there are legitimate reasons for using different assumptions from the valuation but our use of “same as”, with noted exceptions, requires this is only in a limited number of specific situations, to limit the risk of cross-subsidy from inconsistent assumptions being used.
4.35. In finalising the standard, we have amended the wording “allowing for the different effective date" in P7.4b to "allowing for a different effective date” as we agree this better reflects the fact that there may not be a different effective date for both calculations. We have not sought to define "effective date" as we consider this is well understood by practitioners.
4.36. We have also amended P7.8 to limit the communication of the expected resulting cross-subsidies to those arising from differences in demographic assumptions (i.e., to exclude those arising from market movements), as we agree that the exception set out in P7.4b does not create any cross-subsidy.
Question 5: Do you agree with the proposal to extend the requirements of P3.1 to accrual rates? Please provide reasons for your answer and alternative approaches where relevant.
4.37. There were twelve respondents to this question, of which two-thirds fully agreed with the amendments to P3.1.
4.38. Two respondents suggested the wording of P3.1 be amended to allow for single employer CMP schemes which have fixed accrual rates, and a further two suggested it refers to the "level of uncertainty in relation to future benefit adjustments, allowing for variation in future accrual rates".
4.39. One respondent proposed that the footnote to P3.1 be updated to add relevant references to live running tests under the UMES legislation, to accompany those for the single employer case.
4.40. One respondent, in answering this question, also commented on P3.2, suggesting it should be updated to reflect considerations related to UMESs, including variability of accrual rates since they may materially affect member outcomes.
FRC response
4.41. The addition of accrual rates to P3.1 is intended to ensure that models capture the feature of UMESs that accrual rates are uncertain, due to the requirement to give actuarial equivalence. Where the scheme design does not allow for accrual rates to vary, for example in a single employer scheme, this additional provision would not add any further burden to practitioners, as there is no variability of accrual rates to model. It is our view, therefore, that the provision as drafted is appropriate for single employer schemes. As models allowing for variable accrual rates will, by their nature, also consider how this impacts future benefit adjustments, the additional wording suggested in paragraph 4.38 is not needed.
4.42. We agree that it is appropriate to include references to relevant UMES regulations relating to live running tests under P3.1. Accordingly, in finalising TAS 310 v1.1, we have added to the footnote to P3.1 to reference both live running tests.
4.43. Through our consultation, we have not identified strong justification or consensus for introducing further provisions with regards to modelling the variability of accrual rates, beyond the amendment to P3.1. As such, we have not amended P3.2.
Question 6: What are your views on the proposed new provisions P8.3 and P8.7? Do you believe the proposed changes create any additional requirements in relation to single employer CMP schemes? Please explain your rationale.
4.44. There were twelve responses to this question, and the responses indicated widespread support for the additional provisions.
4.45. Four respondents commented that, with the introduction of UMESs, the standard could be extended to reference the need to justify any differences in approach for transfers in and transfers out.
4.46. Seven respondents commented on P8.7a, with respondents suggesting that, rather than referring to any material difference between different types of actuarial factors, the provision should refer to any material difference in either assumptions or approaches used to derive different types of actuarial factors.
4.47. One respondent noted an inconsistency whereby P8.7 requires communication on any "material cross-subsidies...as a result of these actuarial factors”, but there are no provisions in P8.1 to P8.5 for practitioners to consider these cross-subsidies.
4.48. Three respondents commented on whether the proposed changes create any additional requirements in relation to single employer CMP schemes, of which two expected that there would not be additional requirements and one that there would but that this was appropriate.
FRC response
4.49. As we noted in paragraph 4.9 of the consultation paper, consistency between other actuarial factors should be broadly achieved by P8.2 which states that factors should be cost neutral on a central estimate basis. We also note that there may practical reasons why the frequency of updating the basis used for cash equivalent transfer value (CETV) factors (as referenced in P8.4) in meeting the legislative requirements to provide a share of fund, may differ from that used for transfer-in calculations. As such, there is no need to require practitioners to specifically consider the rationale for differences in assumptions between transfers in and transfers out.
4.50. In finalising the draft, we have made changes to P8.7a of the exposure draft to clarify that it is our intention that it is the difference between the approaches used to derive different types of actuarial factors which practitioners should explain.
4.51. We acknowledge the potential inconsistency noted in paragraph 4.47 above. In our view, through considering the cost-neutrality of the central estimate basis in P8.2 and the differences between assumptions used for actuarial equivalence and those used for other actuarial factors in P8.3, the actuary is implicitly considering cross-subsidies between different members or groups of members resulting from the choice of actuarial factors. Our view is that an additional provision is not required here.
4.52. Finally, whilst there were only a few responses in relation to the implications of the proposed changes for single employer CMP, it was encouraging that the responses suggest that there are no expected issues.
Question 7: What are your views on the proposed changes to provisions in relation to viability assessments? Are there any other areas an actuary should consider in relation to soundness of a CDC scheme?
4.53. There were twelve respondents to this question. The majority agreed with the policy intention explained in the consultation paper and, of these, three respondents explicitly stated that they agreed with not further expanding the requirements on certifying soundness beyond those set out in the legislation.
4.54. One respondent expressed agreement with the change to P5.2b. No other respondents made specific comments on this change.
4.55. Four respondents suggested that P5.1d (or P5.7) should specify a timescale over which the impact of a closure of a scheme to new members or future accrual should be considered. They noted that the impact of closure would be materially different directly after closure compared to the longer term after the closure.
4.56. Two respondents stated that the addition of P5.1d was not consistent with TPR's Code of Practice which was in draft form at the time of consultation. One respondent referred to TPR's consultation on the draft code, which asked whether it was necessary for trustees to consider resilience to closure when applying for authorisation. The other respondent queried whether this results in inconsistent expectations where the FRC expects practitioners to consider and communicate the impact of closure, while trustees are not required to plan for such an event.
4.57. Two respondents expressed concerns that the requirements of provision P5.1d and P5.7 could prove onerous. The reasons given for this view included the large uncertainty in relation to the potential timing or likelihood of a scheme closure, and that it may imply the need for quantification. These respondents requested clarity or guidance on the level of analysis expected.
4.58. In addition, a number of comments on this question related to provisions where there were no proposed changes in the exposure draft, and which relate to both single employer schemes and UMESs.
FRC response
4.59. As explained in paragraphs 5.4 and 5.5 of the consultation paper, closure of schemes to future accrual or new entrants may in some circumstances result in either a sudden or gradual downward shift in expected benefit levels or adjustments which trustees and members may not be expecting. It is therefore appropriate that practitioners consider this as part of their advice on scheme soundness, regardless of the timing of this occurring, rather than for the standard to prescribe a timescale. Our view is that practitioners' modelling should be able to identify the broad impact of closure and the term over which changes happen.
4.60. Our policy intent for P5.1d is for practitioners to consider whether the impact of closure of a scheme on members' benefits is relevant to the practitioners' view on soundness. It is important that trustees understand any risks to the expected level and adjustments to benefits as part of certifying soundness. We consider this to be consistent with the requirement in TPR's Code of Practice, under financial sustainability, for evidence of the scheme's ability to move towards supporting continuity option 3 (closing the scheme to new contributions or members) at the earliest opportunity. The ability to move to continuity option 3 is impacted by the effect this may have on members' benefit adjustments.
4.61. A majority of the respondents were supportive of P5.1d and P5.7 and the view that these provisions are onerous was not widely expressed. The provisions leave sufficient scope for practitioners' judgement in the depth of analysis carried out (for instance what scenarios may be most relevant) and how best to communicate the impact a scheme closure may be expected to have on expected benefits.
4.62. In relation to paragraph 4.58 above, as the comments did not relate to proposed changes in the exposure draft and were limited to only one respondent, we have not made changes at this time.
Question 8: Are there any areas where additional guidance would be helpful? If so, please set out the specific areas and/or provisions where guidance may be helpful.
4.63. There were twelve respondents to this question, of which five commented that there was no need for additional guidance.
4.64. Two respondents suggested that it may be helpful for guidance to include the issues set out in paragraph 3.19 of the consultation relating to practical considerations on the choice of timing of the relevant period, if these were not included in P7.3 and P7.7 (see question 3).
4.65. While there were several other suggestions for additional guidance, in each case they were individual suggestions raised by one respondent and there was no clear consensus on any area in which further guidance was needed.
FRC response
4.66. As mentioned in our response to question 1, alongside the final standard we have issued guidance on advice relating to the choice of rating factors.
4.67. As noted in our response to question 3, we agree that there are practical issues that may be considered in setting the relevant period, but we do not consider it necessary to separately illustrate this in the relevant provisions or in guidance.
4.68. We do not therefore propose to produce guidance in relation to any further areas of work for CMP pensions at this time. We will, however, keep this under review as schemes are developed and begin operation.
Question 9: Are there any further aspects of technical actuarial work you expect to be impacted by the introduction of UMESs regulations which are not adequately covered by the proposed changes to TAS 310? If so, please explain what they are.
4.69. There were twelve responses to this question.
4.70. The majority of respondents did not expect any further areas of technical actuarial work to be impacted by the UMES regulations.
4.71. Two respondents commented that the definition of central estimate in the Glossary needs to be updated to reference both the 2022 and the 2025 regulations.
FRC response
4.72. We agree with the comment about the central estimate definition, so we have updated this in finalising the standard.
Question 10: What are your views on the proposal that the standard would be effective from 31 July 2026? Please set out any practical difficulties which you believe this might cause?
4.73. There were twelve responses to this question and respondents expressed support for the standard coming into effect from 31 July 2026.
4.74. A majority of respondents requested that the final standard be released as soon as possible, with a number of these noting that actuarial work on UMESs is already being carried out and there may be issues if the final standard is released close to the effective date and it differs materially from the exposure draft.
FRC response
4.75. As there are no substantial changes in finalising the standard, the FRC has issued the standard with an effective date of 31 July 2026 as planned.
Question 11: Do you agree with our impact assessment? Please give reasons for your response.
4.76. There were eleven responses to this question.
4.77. The respondents generally agreed with the impact assessment, although for a minority of respondents this was conditional on the issues they had identified in their responses to other questions being addressed.
FRC response
4.78. We are pleased to see widespread support for our impact assessment. With the changes to P7.1 (supplemented by guidance) and P7.2, we consider that the impact assessment set out in the consultation paper remains appropriate.
5. Impact assessment
Benefits
5.1. The changes to TAS 310 are in light of the requirements of the new legislation for UMESs and TPR's draft revised Code of Practice for UMESs which have been issued since the publication of TAS 310 v1.0.
5.2. This new type of pension scheme introduces greater flexibility and innovation in occupational pension provision and the proposed changes to the standard relate to new activities required in supporting the design, authorisation, and ongoing operation of UMESs. The benefits of these changes are from promoting quality in technical actuarial work in relation to this new type of scheme, thereby supporting:
- market development and raising public confidence in this important emerging area; and
- intended users (e.g. trustees/governing bodies and employers) to fully understand and make well-informed decisions in all phases of the operation of UMESs, ultimately leading to better outcomes for pension scheme members.
5.3. These changes address the following:
- Actuarial equivalence between expected contributions and expected benefit build up being achieved and maintained in an appropriate way, such that members are not adversely impacted by unintended cross-subsidies.
- Members exercising options in a scheme, such as transferring benefits in or out of the scheme, being treated fairly relative to other members.
- The risks to members' benefits that may arise from a closure of the scheme to new members or new accruals are understood by decision-makers and have been appropriately managed.
- The appropriateness of communications to members relating to the future levels of benefit, considering that accrual rates may vary over time in a UMES.
Costs
5.4. The changes to TAS 310 have arisen following the responsibilities imposed by the new UMES regulations and TPR regime. Any costs on the actuarial profession which arise from the introduction of TAS 310 v1.1 are due to the regulatory requirements for this new type of scheme. DWP set out their cost benefit analysis in relation to the UMES regulations as part of the consultation outcome (Unconnected Multiple Employer CDC Schemes: Impact Assessment).
6. Appendix 1 – Amendments to the exposure draft
| Provision | Issue | Change |
|---|---|---|
| P3.1 | Outdated reference to regulations | Footnote reference to live running tests updated to include 2025 regulations |
| P5.1 | Typographical error | Removed duplicated 'in' |
| P7.1a | Use/underlining of 'all' in 'all material rating factors' | Updated 'material' to be in bold and removed 'all' |
| P7.2/P7.6 | Unclear that the provisions do not apply if a member-level method of actuarial equivalence is being used | Redrafted P7.2 and P7.6 to clarify that they apply only where employer-level test is being considered |
| P7.3/P7.7 | Unclear that provisions apply to both the timing and length of the relevant period | Redrafted P7.3 and P7.7 to clarify that the advice is on both the timing and the length of the relevant period |
| P7.3c/P7.7c | Provision should allow for a review of accrual rates without necessarily making a change | Redrafted P7.3c and 7.7c to refer to where '...accrual rate may need to be reviewed during the relevant period' |
| P7.4 | Provisions unclear as to which actuarial valuation is relevant | Drafted P7.4 and P7.4a to refer to the most recent actuarial valuation |
| P7.4b | Effective date of valuation and accrual rate calculations may be the same | P7.4b updated to refer to 'allowing for a different effective date' |
| P7.5b | Lack of clarity on how materiality is applied to communication in advice on rating factors | Updated provision to refer to 'expected material cross-subsidies' |
| P7.8 | Unnecessary communication requirements related to cross-subsidies | P7.8 updated to refer only to cross-subsidies resulting from differences in demographic assumptions |
| P8.7a | Unclear drafting | P8.7a updated to refer to '...difference in approach to setting [factors]' |
| Glossary | Definition of accrual rate | Updated definition of accrual rate to refer to '...a member's pensionable salary' |
| Glossary | Definition of central estimate | Updated to reference 2022 and 2025 regulations |
| Various paragraphs | Inconsistent use of bold text and underlining | Updated defined terms to be in bold throughout the standard and removed any underlining of words |
7. Appendix 2 – List of respondents
7.1. The FRC received thirteen written responses to the consultation, eleven of which were not confidential and are published on the FRC website. The respondents not requesting confidentiality were:
- Association of Consulting Actuaries;
- Aries Pensions & Insurance Systems;
- Aon Solutions UK Limited;
- Gallagher Benefit Services;
- Hymans Robertson LLP;
- Institute and Faculty of Actuaries;
- Mercer Limited;
- Isio Group Limited;
- Lane Clark & Peacock LLP;
- The Society of Pension Professionals; and
- WTW.
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