PSI20.2.12 - Funding and Surpluses: Self-Administered Schemes - Form of Actuarial Reports - Valuation Basis

(This archived guidance relates to HMRC discretionary practice before the 6th April 2006. For current guidance on Registered Pension Schemes see the Registered Pension Schemes Manual)

Look at the various assumptions critically. In particular, check the mortality assumptions; and the yield differentials between salary inflation, future pensions increases and interest (see PSI20.1.20-35). This section also shows how the actuary has valued the scheme’s assets. There are many ways in which the actuary may do this. His aim will be to bring the investments into the valuation in a manner consistent with the treatment of the scheme’s liabilities. A common method involves estimating all the expected proceeds from the investments and discounting these back to the valuation date at the rate of interest assumed. This approach is the same as that normally used for valuing liabilities.

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