With a 31 March year-end, there are a number of considerations for company directors to take into account. These include setting assumptions and for auditors to determine whether these 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.
Key findings include:
- The impact of Guaranteed Minimum Pension (GMP) equalisation has been estimated at less than 1% of the accounting liabilities for 70% of schemes surveyed. Although for a small number, the impact exceeded 3%.
- New mortality tables and projections have been released. The latest Continuous Mortality Investigation (CMI) 2018 mortality projection model, leads to lower life expectancies and a reduction in liabilities if the core parameters are used.
- Discount rates on AA corporate bonds were lower in Q1 2019, compared to last year. This will correspond to lower discount rates taken for accounting purposes. As a result, there will be an increase in liabilities, although this is likely to have been offset by returns on assets.
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