PPF adopts mortality changes as TPR issues dispute code
UK - The Pension Protection Fund (PPF) has confirmed changes to the mortality and discount rate assumptions will come into force from today (March 31 2008).
The decision follows a four-week consultation, which suggested changing the mortality assumptions for the Section 143 (S143) valuation to a medium longevity cohort, and to increase all existing discount rates for the Section 179 (S179) valuation by 0.3%. (See earlier IPE story: PPF changes could reduce number of eligible schemes)
Details of the responses to the consultation will be published in April, however the PPF said the new assumptions only need to be used for S143 and S179 valuations that take place on or after March 31 2008.
It also confirmed the changes will not affect the 2008/09 levy, as this will be based on the PPF's estimate of the S179 position at October 31 2007, though it added the 2009/10 levy will be based on the PPF's estimate of the S179 position at 31 March 2008, and stated "it is intended that the new assumptions will be taken into account in that estimate".
The PPF claimed the changes are being made in response to "recent developments in the buyout market" including the introduction of a number of new players, as the assumptions have not been altered since September 2006.
Guidance on the PPF changes to the S143 and S179 assumptions can be found at the PPF website here.
Elsewhere, The Pensions Regulator (TPR) has laid its code of practice on reasonable periods for dispute resolutions before Parliament.
Existing legislation requires trustees or managers of occupation pension schemes and trust-based stakeholder schemes to ensure there is a procedure in place, for people with an interest in the scheme, to apply for a decision on a matter in dispute.
As a result, the code of practice - 'Dispute resolution - reasonable periods' - sets out TPR's expectations of how the process should work, which include:
Trustees or managers may choose to adopt a procedure with a shorter decision and notification than four months if they wish.
A consultation report, which summarised feedback from the November consultation, was published in February and provided additional clarification on certain points, including notification stating the four-month reasonable period only applies to the first stage of the dispute resolution process.
Now the code has been laid before Parliament, there is a period of 40 days in which representations against the rules can be made, but at the end of this the code will be brought into force.
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