The Pensions Regulator has published the final version of its guidance for trustees when choosing mortality assumptions, together with a report on the responses to its consultation exercise conducted earlier in the year. In July 2008, the Regulator announced that it was postponing its planned changes until the start of the next scheme valuation cycle, while it considered the consultation responses (see Legal update, Pensions Regulator postpones scheme funding mortality changes).

The main development arising from the consultation is that, contrary to the Regulator's original plans, schemes' mortality assumptions will not count as an additional primary "trigger" leading to regulatory intervention. Instead, the Regulator will only examine mortality assumptions if a scheme has already come to its attention under the existing four primary triggers. As for setting assumptions, the guidance does not prescribe a uniform approach, but says that good practice requires all funding assumptions to be evidence-based and clearly and transparently described. Trustees must obtain actuarial advice about the continuing appropriateness of assumptions. Details of mortality assumptions will be required in scheme returns and recovery plans in the future.

The guidance applies for the valuation cycle which started on 22 September 2008, and under which schemes in deficit must finalise recovery plans by December 2009. For more about the funding process, see Practice note, Scheme-specific funding.

See Consultation report and Good practice guidance for trustees when choosing mortality assumptions, Pensions Regulator, 23 September 2008.