This edition covers a selection of the key financial assumptions required for determining pension liabilities under UK and international accounting standards as at 30 September 2018.
There are a number of considerations for company directors with a 30 September year-end to take into account when setting these assumptions and for auditors in determining whether the assumptions are appropriate. Some of the technical issues relevant to those involved in the preparation and the audit of pension disclosures are covered in detail. These will also be relevant for those companies currently planning for their 31 December 2018 year-end disclosures.
Key findings include:
- discount rates are expected to be higher than last year; reducing liabilities
- moving to the latest Continuous Mortality Investigation (CMI) 2017 mortality projection model also leads to a small reduction in liabilities
- if clarity on Guaranteed Minimum Pension (GMP) equalisation requirements emerge this may lead to higher liabilities and unexpected P&L charges