FRC updates its guidance to AS TM1 to bring further clarity

News types: Guidance

Published: 21 June 2023

The FRC is today issuing an update to the guidance for Actuarial Standard Technical Memorandum 1 (AS TM1) version 5.0. This replaces the previous version of the guidance issued in October 2022, and provides further clarity on:
  • Circumstances in which the FRC expect paragraph C.2.15 (circumstances in which volatility cannot be determined reliably) to be applied; and
  • Application of paragraph C.3.12 (guaranteed annuity terms)

The update also corrects an error in paragraph 3.9, where a year was incorrectly stated.
AS TM sets out the required approach for producing the annual Statutory Money Purchase Illustrations (SMPIs) received by people saving for retirement in defined contribution pension plans.
The FRC issued AS TM1 version 5.0 and its associated guidance in October 2022, which is effective for SMPIs issued on or after 1 October 2023. 
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