Regulation 6 Valuation of liabilities—allowances

In calculating liabilities of a scheme an appropriate allowance shall be made for each of the factors described in paragraphs (2) to (4) of this regulation, subject to those provisions and to paragraphs (5) and (6).

Pensioners mortality: unless based upon experience of the operation of the scheme or other like schemes where mortality is not expected to be different, the mortality assumptions to be used for the purposes of the valuation, are those in the PA (90) Mortality Table, published in 1979 by the Institute of Actuaries and the Faculty of Actuaries, rated down by one year.

Salary scales: any assumption in respect of career escalation in respect of salaries shall be based, where there is such a scale, upon a specifically constructed scale, but, where there is no such scale, an amount not exceeding 1 per cent. shall instead be deducted from the net investment yield.

Expenses: where the cost of administration of a scheme is borne by the scheme under the terms of the trust deed provision shall be made for future costs by taking account of the average of such costs incurred over the three years preceding the effective date of the valuation, and whether or not contributions are being paid to the scheme.

Other factors: assumptions may be made, where appropriate, in respect of staff turnover and other factors relating to the particular circumstances of a scheme.

Changes in actuarial assumptions from those used in the previous valuation may be made where they are justified and any such change shall be notified in writing to the Board at or before the time when the valuation is produced or the certificate is given under Paragraph 5.