To continue reading please register or login to your OHW+ account.
A move by the Institute of Actuaries to adopt new rules for writing pension evaluation reports could force employers to pump more cash into pension plans.
Following criticism of current practice which allows actuaries to include future investment returns as though they had already been earned, the institute said it would review the reporting of pension valuations.
Actuaries are keen to show exactly how solvent a pension scheme is.
Solvency would be defined as the ability of the employer to pay all promised pensions at any given time. Actuaries say that such a regime would reveal that most UK occupational pension schemes are likely to be shown to be currently insolvent.
Mike Pomery, chairman of the Institute of Actuaries, told the Financial Times: “This will put companies under pressure to put a lot more money into their schemes. It is fundamentally changing the framework in which final salary pensions were set up.”
He added that the profession would stop short of ordering employers to fund their scheme to any particular level of solvency, saying that would be a matter for the Government.
