Commenting on the Financial Reporting Council’s (FRC) Consultation Paper ‘Proposed revision to AS TM1: Statutory Money Purchase Illustrations’, Callum Stewart, Head of DC investment says:

"We welcome the FRC’s consultation on proposed changes to the Actuarial Standard Technical Memorandum 1 (AS TM1) which takes on an additional layer of significance given the statutory illustrations of money purchase arrangements which will feed into the pensions dashboard. Whilst we agree with the headline objectives supporting the proposed changes, we have significant concerns with some of the proposed methods for achieving them. In particular, we believe the proposed accumulation rate methodology will not enable fair comparisons across different providers and would in fact disadvantage more sophisticated investment approaches that, for instance, invest in illiquid assets and could provide better value. We also believe that now is the time to move away from the historic annuity focus and introduce an approach reflecting the flexibility DC savers have. We hope the FRC will address our concerns and consider the alternative solutions we have outlined.”