As reported in our March Update, in February 2008 TPR published a consultation document on longevity changes which sought views on how TPR expects pension schemes to take account of future improvements in longevity. The consultation document originally suggested introducing changes applying to valuations due from March 2007.
However, as a result of the responses received, TPR has decided to delay introducing changes to the way longevity is treated in the scheme funding regime. TPR has said that changes would not now apply until the beginning of the next defined benefit scheme valuation cycle starting in September 2008. This will impact valuations, and follow-up recovery plans that must be submitted to TPR by schemes in deficit, due from December 2009. If the changes had been implemented as proposed, some schemes would have seen a significant increase in the actuarial value of their liabilities and may have had to re-open funding negotiations which may have already been close to completion.
TPR has also said that it will publish a full response to the consultation and the final version of its new approach later in the summer.
View our March 2008 update.