UK - FRS17 is dividing the actuarial profession, senior industry figures claim.
One actuary revealed that some of his colleagues were making “powerful enemies within the profession” by promoting the accounting standard which, consultants claim, is unrepresentative of scheme liabilities.
But he noted that it would be those market-based methods that would come out on top.
He said: “It is just like the collapse of the Ottoman empire.
“We have the discredited and stumbling empire of the dividend yield method of valuation being guarded by the old regime.
“But the young Turks are sitting at the gate with their market-based valuations and will eventually lead the actuarial profession into modernity. It’s just a matter of time.”
Latest research from Barnett Waddingham shows that FTSE100 firms are using widely different assumptions when preparing their FRS17 figures.
Its research – Accounting for Pension Costs Under FRS17 2002 – found that the discount rate used in calculating pension schemes varied from 5.2% to 6%.
Surprisingly, other assumptions – such as those for salary growth – varied wildly, while the long-term expected return on bonds varied little.
The report stated: “It is interesting to see both the areas of consistency between companies and, perhaps even more so, the extent to which companies have chosen different assumptions for reporting under FRS17, given that it was intended to be a fairly prescriptive accounting standard.”
The Pensions and Lifetime Savings Association (PLSA) is in the process of convening an industry-wide group to take forward the work of the Institutional Disclosure Working Group (IDWG).
The Transfers and Re-registration Industry Group (TRIG) has given its support to an initiative which aims to complete occupational pension transfers within three weeks.
Scottish Widows has completed a bulk annuity deal for the Hitachi UK Limited Pension Scheme.