Q&As

A pension scheme has a buy-in policy for the pensioners in the scheme. The scheme actuaries value the policy annually. Is this a necessary requirement of the actuaries? Can the insurer who the policy is with value the policy instead?

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Published on LexisPSL on 15/04/2020

The following Pensions Q&A provides comprehensive and up to date legal information covering:

  • A pension scheme has a buy-in policy for the pensioners in the scheme. The scheme actuaries value the policy annually. Is this a necessary requirement of the actuaries? Can the insurer who the policy is with value the policy instead?

We have assumed that the scheme to which the buy-in policy relates is a defined benefit (DB) scheme to which the funding requirements of Part 3 of the Pensions Act 2004 apply.

As explained in Practice Note: Actuarial funding valuations, a full actuarial valuation of a DB scheme is required at least triennially (ie every three years). However, in the years, where no full actuarial valuation is required, scheme actuaries must prepare an actuarial report. The purpose of the annual actuarial report is to give an estimation of the scheme’s funding position, as an update to the last full actuarial valuation. In particular, an actuarial report must include an assess

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