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- The Pensions Regulator (TPR) published its Annual Funding Statement (AFS) on 27 April 2022. It is aimed at both trustees and sponsors, particularly those with triennial actuarial valuations between 22 September 2021 and 21 September 2022.
- TPR highlights the uncertainties for scheme funding and employer covenant driven by significant recent events: the conflict in Ukraine, the COVID-19 pandemic and Brexit. This is alongside the current background of high inflation, high energy prices, rising interest rates, slower economic growth and greater market volatility.
- Favourable investment conditions over the last three years may mean that, for many schemes, funding levels are ahead of plan. TPR also comments on key considerations for schemes at or approaching full funding on their technical provisions basis and the importance of robust risk management.
- Where trustees consider it appropriate to adjust their mortality assumptions, TPR have confirmed it expects any reduction to liabilities to be no more than 2%, unless there is strong evidence supporting a larger reduction.
• Plan for the long term, looking firstly to recover any technical provisions deficit then continue the journey to a long-term funding target (LTFT), all whilst managing risk in an integrated way.
• Choose key actuarial assumptions, such as inflation and mortality assumptions, carefully in light of current understanding of the position. Consider carrying out scheme-specific analysis to robustly determine the impact of COVID-19 on your scheme members.
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XPS Pensions Group plc published this content on 29 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 April 2022 13:46:26 UTC.