In order to be able to follow a Fast Track approach for submitting an actuarial valuation with an effective date on and after 22 September 2024, the scheme actuary will need to provide to the trustees the confirmation wording below.
If the scheme actuary is unable to provide this confirmation a bespoke submission will be required.
We leave it to the discretion of the scheme actuary to add any additional content or information required to this wording to fulfil their professional requirements.
"I [name of scheme actuary] as scheme actuary to [name of scheme] scheme confirm to the trustees that:
In respect of the assumptions underlying the scheme's low dependency funding basis, and, if relevant, the low dependency assumptions used to satisfy a Fast Track test:
- the discount rate is based on nominal gilt yields with an addition that is not greater than 0.5% p.a
- the RPI assumption is derived from the difference between index linked and nominal gilts yields with no adjustment
- the CPI assumption follows the conditions set out in the 'Minimum Fast Track low dependency requirements' of the CPI inflation section of the Fast Track document
- mortality improvements have adopted a recent CMI core or extended model, or equivalent model from an industry recognised reputable longevity company
- scheme options, apart from cash commutation, have only been allowed for if they increase the value of the liabilities
- if the proportion with partners eligible for survivor pensions and/or age difference assumptions are not based on scheme-specific evidence, the assumptions used are at least as strong as that consistent with PPF guidance for section 179 purposes
- where there is not at least one statutory employer with a legal obligation to pay scheme expenses an expense reserve has been included. (For the avoidance of doubt this is a confirmation that a non-zero reserve is included and does not express an opinion as to the amount of that reserve)
Based on my calculation of the duration for the purposes of the relevant test I am satisfied that:
- the technical provisions are at least as high as the appropriate 'Minimum technical provisions percentage' derived from Table 1 of the Fast Track document
- the results of the funding and investment stress test show a lower or equal stress than the appropriate stress parameter derived from Table 2 of the Fast Track document
If applicable, in respect of the recovery plan:
- the length is not greater than three years if the effective date of the valuation is on or after the relevant date, or six years if the effective date of the valuation is before the relevant date. The length of the recovery plan is measured from the effective date of the valuation.
- it makes no allowance for future investment outperformance in excess of the technical provisions discount rate
- it satisfies the prescribed conditions relating to increases in deficit repair contributions for Fast Track submissions as set out in the 'Increases to deficit repair contributions (DRCs)' section of the Fast Track document
- if relevant, the allowance for post valuation experience does not exceed the maximum positive favourable amount that could be determined under the first paragraph of the 'Post-valuation experience' section of the Fast Track document, and the submission also meets the other two paragraphs of that section
This confirmation states that the above tests and conditions are met, but only confirms this. In particular, it does not constitute an opinion on whether or not the legislation and principles in The Pension Regulator's defined benefit funding code of practice are being complied with. Neither does it provide an endorsement of any information provided by the trustees that has been used in satisfying the tests and conditions, for example the split of assets used in the funding and investment stress test.
References to the Fast Track document or parameters are to the Fast Track submission tests and conditions document dated 20 November 2024 and the parameters specified in it."