There are a number of considerations for company directors with a 31 December 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 March 2019 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
- however, falls in asset values over the year means many schemes will see little change in their funding position
- on 26 October 2018, the high court published its judgment on Guaranteed Minimum Pension (GMP) equalisation requirements, and this may result higher liabilities and unexpected P&L charges
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