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The Financial Reporting Council (FRC) has concluded
that no change will be made to the assumptions set within the Actuarial Standard Technical Memorandum 1
(AS TM1). The current version (v4.2 Oct 2016
) will remain in force, until further notice, for Statutory Money Purchase Illustrations (SMPIs) produced in the year beginning 6 April 2020.
The stated main reasons for this conclusion are:
In 2012, Mr Hymanson acquired a certificate of Fixed Protection
, preventing his lifetime allowance decreasing from £1.8m to £1.5m. A condition here is that contributions must cease; Mr Hymanson continued to pay company rental payments into his pension (failing to cancel Standing Orders), believing this would not be deemed a contribution. HMRC did not agree and revoked protection.
Mr Hymanson took his case to the
First-Tier Tribunal which ruled, in November 2018
, that it was unreasonable for HMRC to revoke protection after what had been an honest mistake.
HMRC informed the Pensions Industry Stakeholder Forum meeting on 9 April 2019 that it was appealing to the Upper Tribunal (UT/2019/0027). Since then however it has decided not to pursue its appeal - which is unusual. The only explanation forthcoming so far from HMRC is a note included in the
The Pensions Regulator (TPR) has published its analysis
of the expected positions of defined benefit (DB) pension schemes with valuation dates between 22 September 2018 and 21 September 2019: so-called Tranche 14 or T14.
TPR has naturally made a number of approximations and does not hope to account for all scheme-specific characteristics. With only publicly available data to go by, this analysis does not replace scheme-specific assessments
of potential employer affordability.
With the above in mind, TPR's work shows that changes in market conditions - double-digit returns from most major asset classes - mean that deficits on a technical provisions (TP) basis for its DB universe are expected to be marginally better at March 2019 relative to March 2016.
However, the improvement has not been to the extent expected by TPR: deficit reduction contributions (DRCs) will have