FRC calls for industry feedback on DC pension illustrations

The Financial Reporting Council (FRC) is consulting on the future development of actuarial standards for defined contribution (DC) pension illustrations, and has published a discussion paper exploring how those standards could support pension illustrations both before and through retirement.

The FRC's call for feedback forms part of its post-implementation review of Actuarial Standard Technical Memorandum 1 (AS TM1) for Statutory Money Purchase Illustrations (SMPIs).

The review is consulting on all potential areas for development, particularly how accumulation rates are determined for investment funds pre-retirement and the assumptions used to convert the accumulated fund into retirement income.

In an additional discussion paper, the FRC has asked for views on developing new standards for illustrations, in support of the government’s recently published consultation on guided retirement.

The FRC said the standards would be updated to reflect the different ways savers may choose to access their pension savings in retirement.

In particular, the FRC is consulting on how pension illustrations could show the impact of different default pension benefit solutions before retirement, and how they could better illustrate withdrawal sustainability and converting the remaining pension into income once savers have entered retirement.

Commenting on the reviews, FRC executive director of regulatory standards, Mark Babington, said: “For millions of savers, pension illustrations provide an important indication of how their savings today could translate into income in retirement.

"As DC pensions become increasingly important, it is vital that savers receive information that is clear, consistent and relevant to their needs.

“As part of our commitment to supporting the Government's pensions reform agenda and the ambition set out its roadmap to deliver a pensions system fit for the 21st century, we are seeking industry views on how pension illustrations should evolve to better support savers both before and throughout retirement.”

The FRC invited feedback from stakeholders with an interest in SMPIs or involved in providing them, including trustees, insurers, wealth managers and administrators.

The deadline for input into both consultations is 26 January 2027.



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