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FRC has issued a revised pension standard

The UK Financial Reporting Council (FRC) has issued a revised version of actuarial standard TM1 (AS TM1).

The AS TM1 sets out the assumptions to be used in annual statutory money purchase pension illustrations (SMPIs).

The FRC said the most important change is the removal of the 7% cap per annum on the rate at which pension scheme investments are assumed to build up. The regulator will monitor the assumptions used in SMPIs to assess the impact of this removal.

"Providers of SMPIs must think very carefully about the assumptions they use in producing these illustrations," FRC's Actuarial Council chairman Olivia Dickson said.

"The assumptions on future investment returns need to be justifiable and providers should be ready to explain to members how they chose these assumptions."

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The Financial Reporting Council

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