AS TM1 accumulation rate survey
23 December 2020
The Financial Reporting Council (FRC) has published the results of its annual survey of the accumulation rates used by providers to make the projections of funds to retirement.
Since 2013 the FRC has undertaken an annual survey of the accumulation rates used by providers. This is done to check market consistency with the underlying principles of the actuarial standard that sets the framework (AS TM1).
In 2020, the FRC received responses from 18 providers who collectively issue over 26 million SMPIs. Approximately 47% of these statements were issued to individuals with contract-based arrangements.
Legislation requires providers to issue a Statutory Money Purchase Illustration (SMPI) in respect of each defined contribution pension policy or arrangement to each policy holder or scheme member. The FRC has responsibility for setting the assumptions and maintaining the framework within which these illustrations of projected retirement income are made.
The survey results show that accumulation rates used for 2020 illustrations were reduced overall to those used in 2019.
Additionally, in 2020 the FRC asked to what extent the annual statements were impacted by the current pandemic. The responses showed that no changes were made to the rates of accumulation although a limited number of respondents did provide some commentary on investment implications.
More details can be found in the survey report at the following link