UK - The Pensions Regulator has scrapped earlier proposals to introduce a funding trigger which was effectively based on long-cohort mortality assumptions.
The idea presented in the longevity consultation was controversial and sparked much debate as experts argued TPR had effectively warned anyone operating less than a long cohort could trigger a TPR review.
Pension fund representatives and consultants had argued the use of a long cohort to measure mortality risk on the pension fund was not always necessary on all pension funds and noted it would substantially increase costs for pension scheme were they to do so.
TPR has now confirmed it will only look at the scheme's mortality assumptions if the scheme is flagged by another trigger.
TPR chairman David Norgrove today said: "Nobody is disputing the evidence on continuing mortality improvements - people are living longer and this will impact upon pension costs. Despite some of the headlines, our focus is on achieving clarity over how pension schemes recognise the accrued costs of their existing liabilities - and not about identifying new costs or imposing new duties.
" I hope that the industry will welcome our guidance, coming as it does at the start of a new valuation cycle," added Norgrove.
On the back of this development, TPR has confirmed the mortality assumption is only one measure it would look at, and said mortality assumptions "will only be scrutinised where the scheme is flagged up by an existing trigger".
It also said it notes "employer circumstances may change", acknowledging "the best guarantee for any occupational pension scheme is the ongoing support of a viable employer".
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