The Financial Reporting Council (FRC) has published a revised version of the Actuarial Standard Technical Memorandum 1 (AS TM1), which is set to come into force from 6 April 2024.

The revised standard sets out higher accumulation rate assumptions in response to higher long term interest rates and gilt yields resulting in higher long term expected returns.

AS TM1 specifies the assumptions and methods to be used in illustrations of money purchase/defined contribution (DC) pensions, in order to ensure that the basis for producing DC illustrations remains consistent between providers to help users better understand their retirement savings.

The FRC annually reviews the appropriateness of the assumptions set out in AS TM1 to ensure they remain fit for purpose.

Commenting on the revised standards, FRC executive director of regulatory standards, Mark Babington, stated: “It is essential that pension scheme members have confidence in the consistency and reliability of their pension illustrations.

“The revisions announced today will enable pension illustrations to better reflect potential returns from their pension savings.”

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