UK - New debt regulations for occupational pension schemes lack clarity and contain unnecessary requirements for trustees, according to Lane Clark and Peacock (LCP).
The actuarial and consultancy firm has taken issue with four parts of the Occupational Pension Schemes (Employer Debt) Regulations 2005, claiming they: give no guidance on how to assess a buyout approach to valuation, lack clarity on the required approach to valuation, present the possibility of having to undertake further MFR valuations and unnecessarily require trustees of money purchase schemes to seek actuarial advice.
“Scheme actuaries are continuing to be placed in an increasingly intolerable position of having to second guess annuity pricing in an extremely limited market,” said David Everett, pensions research partner at LCP.
“Actuaries neither have rule of thumb guidance from the two insurers who operate in this market, nor indicative guidance from the Pensions Regulator or the Pension Protection Board to assist them in their calculations.”
LCP questioned why the MFR test is being retained for certain calculations and by when it would be abolished.
“The regulations also impose a requirement on trustees of multi-employer money purchase schemes to obtain actuarial advice if there is a need to apportion an unpaid levy between employers,” Everett said.
“Quite why an actuary is needed to carry out a non-actuarial calculation beats me.”
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