§ John MannTo ask the Chancellor of the Exchequer what assessment he has made of differences between the pension projection basis provided by the Financial Services Authority and the Department for Work and Pensions(a) to new businesses and (b) in annual forecasts. [105904]
§ Ruth KellyI understand that the Financial Services Authority (FSA) have undertaken an analysis of the pension projection basis set by the Department for Work and Pensions (DWP) for Statutory Money Purchase Illustrations (SMPIs).
Following consultation in April 2002, the FSA decided that the assumptions, including mortality rates, annuity interest rates, and other data, used by firms to compile point of sale projections should be amended to bring them into line with the DWP basis.
SMPIs will be in real value terms, while projections at the point of sale, which are governed by FSA rules, are in monetary terms, although firms have the option to show real value figures. The FSA are currently consulting on a new disclosure regime. This proposes SMPI based projections should be mandatory at the point of sale.