AS TM1 v5.1 will remain in effect for Statutory Money Purchase Illustrations calculations performed between 6 April 2025 and 5 April 2026.The FRC reviews the appropriateness of the assumptions set out in AS TM1 annually to ensure they remain fit for purpose. The FRC is responsible for maintaining and issuing AS TM1, which specifies the assumptions and methods used in statutory illustrations of money purchase (defined contribution) pensions.Read the feedback statement from the FRC's consultation on AS TM1.
Brief
On February 6, 2025, the Financial Reporting Council (FRC) issued an update regarding "FRC confirms no amendments to AS TM1". The FRC has confirmed that AS TM1 v5.1 will remain in effect for Statutory Money Purchase Illustrations calculations performed between April 6, 2025, and April 5, 2026, as the assumptions set out in AS TM1 are deemed fit for purpose.
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Purpose
The purpose of this update is to inform stakeholders that AS TM1 v5.1 will remain in effect for statutory money purchase illustrations calculations performed between 6 April 2025 and 5 April 2026. This means that the existing assumptions and methods specified in AS TM1 will continue to be used during this period, without any changes or updates.
Effects on Industry
The update has significant implications for the pension industry, as it affects the way statutory money purchase illustrations are calculated. Actuaries and pension providers must use the same assumptions and methods specified in AS TM1 for their calculations, which may impact their business operations and decision-making processes. The lack of changes to AS TM1 during this period is likely to be welcomed by some industry stakeholders, as it provides stability and continuity.
Relevant Stakeholders
The update directly affects actuaries, pension providers, and other organizations involved in the calculation and provision of statutory money purchase illustrations. This includes insurance companies, pension administrators, and other financial services firms that offer defined contribution pensions. The FRC’s consultation on AS TM1 also provides feedback to stakeholders who responded to the proposals.
Next Steps
There are no immediate next steps required for businesses or individuals in response to this update. Actuaries and pension providers must continue using the assumptions and methods specified in AS TM1 v5.1 for statutory money purchase illustrations calculations performed between 6 April 2025 and 5 April 2026. The FRC will review the appropriateness of these assumptions annually, which may lead to future updates or changes.
Any Other Relevant Information
The FRC’s consultation on AS TM1 provides additional context and information for stakeholders. The feedback statement from this consultation is available for review, providing insights into the responses received by the FRC and the considerations that led to the decision not to update AS TM1 during this period. This information may be useful for businesses and individuals seeking a deeper understanding of the pension industry’s regulatory requirements.
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