For many schemes, the 2015 actuarial valuation will be the first valuation to take place against the backdrop of The Pensions Regulator’s new objective regarding sustainable growth for employers that sponsor DB pension schemes and its recent guidance on how it will monitor funding.
The valuation will also take into account the extended period of low interest rates and further adverse movements in real yields since the last valuation. As ever, this will place further pressure on the company in terms of additional deficit funding.
The Regulator’s guidance is clear that it expects employers and trustees to take an integrated approach to the covenant, investment and funding risks relating to their pension schemes.
This note sets out some of the key issues for consideration by employers as part of a formal valuation process.
Around one-third of pension schemes should have a formal actuarial valuation due in 2015, and many of these will have an effective date of 31 December, 31 March or early April.