TAS 300: Revising the Technical Actuarial Standard for Pensions
Published: 18 July 2025
10 minute read
The Financial Reporting Council has revised Technical Actuarial Standard (TAS) 300 to bring greater clarity to practitioners and to ensure it continues to be fit for purpose. Join David Young, Stakeholder Engagement Manager, Andrew Bennett, Senior Actuarial Project Director, and Mark Harris, Actuarial Project Director, as they discuss what revisions in TAS 300 v2.1 mean in practice.
Transcript
0:10
Welcome to another FRC in Conversation podcast.
0:13
My name is David Young.
0:14
I'm the FRC Stakeholder Engagement Manager.
0:16
And today, we're here to talk about the updated technical actuarial standard for pensions, otherwise known as TAS 300, which the FRC has just released.
0:24
Pleased to say that I'm joined today by Andrew Bennett, Senior Project Director and Mark Harris, Project Director, both from our actuarial regulation team.
0:31
Welcome to you both.
0:32
Hi, David.
0:33
Hi, Dave.
0:34
I think let's talk a bit about the broader question of the pensions landscape.
0:38
And I don't think it could have escaped anyone's noticed that there's been a lot happening in pensions in the last few weeks.
0:44
I mean, how has this impacted your update of TAS 300?
0:47
Thanks, David.
0:48
Yeah, you're right.
0:49
Say what's been happening recently and in particular kind of in early June we had publication of both the Pension Schemes Bill and the outcome of the pensions investment Review.
1:00
And those are expected to have an impact in a whole load of different parts of the pensions industry.
1:05
And it's a really exciting time to be working in pensions with all those developments.
1:09
If I think about TAS 300, particularly concerns around how these affect DB pension schemes and particularly how those developments might affect surplus extraction or the establishment, particularly of the new Superfund regime.
1:24
So we will need to be considering the impact of all of this on TAS 300, but we'll only really be able to do that in detail once the full details of of new developments are published.
1:35
And that's a little way down the line at the moment.
1:38
So we're looking at probably around 2027 for service extraction changes to come into effect, maybe 2028 for pension super funds.
1:48
So thinking about our review that we've carried out now, it's important in our minds to keep TAS 300 upstate for work on for instance, pension valuations under the new funding regime.
2:00
So we are not intending that we delay publication of of this revision of TAS 300 at the moment for those those new developments that may be further down the line keeping an eye on the horizon.
2:12
I guess I think before we look at what's changing in TAS 300, I think it'd be great if we compare some context around the TASs and what's their purpose and what are they for.
2:21
That's a really good question.
2:23
What I would start off by saying is we don't produce the TASs just to impose further requirements on actuaries.
2:30
The aim of the TASs really is focused on supporting actuaries, giving good advice to decision makers that those decision makers can rely on, be they corporate sponsors of pension schemes, be they pension scheme trustees.
2:43
And by giving good reliable advice that's really helping those people to make good decisions.
2:49
And it's those good quality decisions that are supporting having a well running, well functioning pensions industry.
2:55
And I mean, what's new in the revised TAS 300 to reflect the changing pensions landscape?
3:00
I know you touched on some stuff briefly at the start, but do you want to go into a bit more detail there?
3:04
Well, I'd say there's two main areas that change in this new version of TAS 300 around funding.
3:10
We carried out our previous review of TAS 300 concluding in December 2023.
3:16
And at that time we didn't touch the areas of funding and financing within TAS 300 because new regulations around pension scheme funding where in the process of being finalised.
3:26
So now that the new regime for funding is in force, we've updated TAS 300 to reflect that.
3:33
So that's one area.
3:34
Then if I talk about surplus, so over recent years the funding position of DB pension schemes has really improved, which is very good news.
3:43
Many of them are in surplus now and conversations are starting to happen between trustees and sponsors of schemes, potential use of those surplus.
3:53
And both sides may be taking actuarial advice on this.
3:57
And it's also worth noting the pension scheme Bill that I mentioned has measures around supporting kind of refund of surplus to employers in the right situations.
4:06
That's one potential use of surplus.
4:08
There's many others as well that we consider within TAS 300.
4:11
And it's been many years really since the pensions industry has had to wrestle with uses of surplus.
4:18
So it's an area that's relatively new for a lot people in terms of giving advice and it's appropriate for us to set standards that support and promote quality of work that actuarial practitioners are producing in this area.
4:31
Those two main areas, funding and surplus.
4:34
But it's also worth mentioning that in the review, we've taken the opportunity to remove some provisions that have been in TAS 300, which we also feel are no longer needed.
4:44
So sort of how more informed decisions in a developing industry I guess.
4:48
So, Mark, if I turn to maybe get into some of the more technical aspects of the updated TAS 300, think if we talk about the funding regime first, can you talk us through some of the main changes around the funding and then what people have to be doing differently?
5:04
Yeah, sure.
5:05
So basically what people have to do differently is not really because of TAS 300, it's basically driven by the new funding regime.
5:12
So the new provisions in the TAS are really there to reflect the new regulations that we've got in force and the new code of practise from the Pension Regulator.
5:22
But if I talk about what those changes are, first of all, so the new standard we put in various provisions that relate to the three principles that just set out in the regulations.
5:31
So those 3 principles are low dependency on the employer, the risk that a pension scheme takes during his journey plan up to the point of low dependency.
5:40
And then the third area is liquidity.
5:42
And what we've done is really focused on the role of the actuary.
5:46
So the actuary will be advising trustees who are responsible for setting the an investment strategy or advising employers who've obviously got to agree that strategy with the trustees.
5:55
So let me take those 3 principles in turn.
5:58
So the first one, low dependency.
6:01
And what people will have to do there is really consider the circumstances of the particular scheme and employer that they're looking at.
6:09
So for example, they mustn't necessarily assume that the resilience test that that's given as an example in the regulator's guidance will always be appropriate.
6:18
And then not only do they need to consider that they need to communicate appropriately and that's really about supporting the trustees who have obligations under the regulations as they set their targeted low dependency position.
6:31
And then the second principle, if I move to that, which is about risk during the journey plan, what actually is we'll have to do there is really consider the interaction between the different risks, funding risk, investment risk, covenant risk as a scheme moves towards it's low dependency position through it's journey plan.
6:48
And again, there's provisions as well about communication, so supporting the trustees as they meet their obligations, as they set their risk profile over over their journey plan up until the relevant date when the scheme is significantly mature.
7:01
And then the third principle, it's about liquidity.
7:04
There what actuaries will have to do is really communicate about the impact of the uncertainty that there is around future benefit cash flows.
7:13
And we deliberately haven't included any requirements about asset cash flows because we don't think that trustees typically look to to to actuaries for that, they'll look to investment advisors.
7:23
So we didn't want to put provisions in TAS 300 that actually would find it difficult to apply.
7:29
One of the other areas under the new Fen funding regime that actually is working in this area be familiar with is that they're going to now have to calculate maturity of the liabilities for pension scheme.
7:40
So if you're an actually working on an open scheme and you're recommending that in the calculation maturity there should be an allowance for new entrants and future accrual, then you're going to have to explain that allowance and you're going to have to explain the reason why it's being made.
7:54
I think one of the other things that we need to think about is in the context of setting a funding and investment strategy as trustees do that they're going to be taking advice not just from actuaries, but from covenant advisors and investment advisors as well.
8:07
So actuaries are going to be working alongside other people who are providing input.
8:12
And it's important that the actuaries should understand how that third party input affects the work that they're doing themselves and that they explain or at least tell their intended users about the input that they've used from third parties.
8:24
So there's provisions in the new standard to recognise all of that, quite similar to equivalent provisions that are already in the section in TAS 300 that deals with bulk transfers.
8:34
That's Section 5.
8:35
And then the last thing I'd say about the new funding regime and the TAS is we've also made some amendments about the things that you have to include in scheme funding report.
8:44
And that's really just to reflect the new requirements that are required under the new funding regime.
8:48
And then as Andrew said before, we have managed to find some items in the TAS that would no longer necessary.
8:55
So we've found we've been able to take those out.
8:58
It was good to streamline standards where available.
9:00
Moving to the other side of the updated TAS 300 of the surplus side seems to be a hot topic at the moment.
9:06
And the government referred to making it easier to release surplus to support employers as plans and, you know, benefit the scheme members.
9:12
So can you talk us through some of the changes to TAS 300 in the area of surplus and again what people are going to have to do differently in that respect?
9:20
Yeah, of course.
9:21
So I mean the key change that we've made around surplus in the Tasmania is we've defined what I might call a set of activities, which are really the activities which are how surplus might be used, how trustees or employers might think about using surplus.
9:36
And then what the Tasmania will do is require that if you're actually advising on one of those things, then you've got to consider and communicate the risk to the security of members benefits.
9:46
So that's the risk or the likelihood of members receiving their benefits in full or the likelihood that they might not.
9:51
So the activities we're talking about here are first of all making a payment to the employer, as you said, surface extraction, but then also either increasing accrued benefits or paying for the future build up of pension or paying expenses that the scheme has to payout in each case without there being contributions of a commensurate amount being paid to meet the cost upfront.
10:12
Obviously if the employer puts in the cost upfront, then there's no additional risk being created.
10:17
But the requirements that we set out in the standard for actual to advising on any of these areas are essentially the same or certainly very similar to dividing on an incentive exercise or scheme modification with just the proviso that they only have to consider those requirements which are relevant to the specific circumstances they're looking at.
10:36
And of course, all those requirements may not apply in all cases, but where they do actually will have to apply those in the same way as they do for incentive exercise and scheme modifications.
10:46
And I think it's also important to recognise that all of these changes that you just run us through come after a period of consultation.
10:53
So I think if I just turn back to you, Andrew, do you want to talk a little bit through the consultation process before finalising the standard and then cover what you heard and how that impacted the final standard itself?
11:03
Yes, so David, we had a three month consultation.
11:06
And during the consultation we got a number of responses, which is always really helpful to our process.
11:13
And the responses were supportive of the direction of travel of the changes that we set out in our proposals.
11:18
I think through the responses, they definitely highlighted some areas where respondents had kind of over interpreted some of the wording that we had.
11:28
So based on their responses, we could see they were reading the provisions as expecting more work being needed to comply than we had intended.
11:37
And so based on that feedback, we've revised our wording in places to make our intentions clearer and kind of minimise that risk of of over interpretation.
11:48
And we set out in the feedback statement that we also, so they've just published where we've made those changes.
11:53
The other thing where the majority of respondents actually commented on was the implementation period that we proposed, which was going to be relatively short, just being around a month because a lot of the provisions are related to advice on funding valuations that would already be underway.
12:09
When we looked at the responses, respondents were comfortable their work would comply with the revisions to the TAS, but noted that it's a really short period being given to make the changes they'd need around their own processes to ensure that they were complying with the TASs.
12:24
So based on the feedback, we've reconsidered the implementation period and extended that to to being just a bit over three months instead.
12:32
And we feel that that is proportionate response to the challenges that were raised, but we don't think really has an impact on the risk around the quality of the actuarial work being delivered.
12:42
And connected to that, One of the other things that we've updated is for, for valuations that would have been under the older funding regime.
12:49
So pre September 24 valuations, we've introduced the option for those ones, the advice and those ones to still apply the old version of TAS 300.
12:59
Our intention is that gives additional flexibility and avoids creating any unnecessary burden on the actors doing that work.
13:07
I know you've been doing a fair amount of engagement with stakeholders on this throughout as well.
13:11
And so I'm sure if people were interested to speak to FRC on this, you'd be more than willing to have a bit more of a deep dive session with them, right?
13:17
Absolutely.
13:17
So the the feedback that we received during those consultations is incredibly helpful for us producing kind of the final standard.
13:24
And as you say, we've had a number of conversations with people who've provided that feedback to make sure that we're fully understanding the points they're making and we're able to allow for those appropriately as we consider the final standard.
13:37
So I think just finally, how can actuaries best prepare for this first November 2025 implementation date?
13:43
Well, firstly, I'd say read the revised TAS 300 and also the feedback statement that we've published as well on our website.
13:52
And the feedback statement in particular will summarise the consultation responses and how we allowed for those.
13:59
But as well as reading the standard itself, we'd really encourage practitioners to read the guidance that the FRC publishes on proportionality.
14:07
So that guidance is really there to assist practitioners in applying the standards and what they might need to think about in complying with them.
14:15
And the final thing is that I'd ask those people listening to this podcast to talk to their colleagues about the changes and encourage them to listen to the podcast themselves if they'll find that useful.
14:25
If anyone is interested, we'd be really happy as the FRC to come and talk to actuaries about the revised TAS 300.
14:33
So if people would like to do that, contact either myself or Mark or can e-mail the team at [email protected].
14:43
Great.
14:43
Well, I think that just leaves it to me to say thank you, Andrew.
14:47
Thank you, Mark for being here today, and then thank you to everyone who's listened.
14:50
Hopefully this is valuable and it's a really exciting time to be working around the pensions industry.