Inflationary protection and investigating reporting management change

This Working Party plans to look at research in the following areas:

• transparency of Defined Benefit Investment charges
• pricing of inflation protection in the market.

During Q1, 2015, members of the Working Party presented at a series of IFoA Current Issues in Pensions seminars, on the effects of the Pensions Freedoms regime on how actuaries will advise Defined Benefit schemes.

This working party is currently undertaking an overview of inflationary protection in the context of UK pensions and expects to publish an extensive paper on this in Autumn 2015.

Members are also investigating modelling the extent of idiosyncratic mortality risk amongst smaller DB pension schemes.

The working party are presenting at the Pensions Conference 2015 two short pieces of topical research carried out for actuaries working in the pensions field:

1. Giving Members Freedom or Cutting them Adrift? – The effect on members and DB schemes of the freedoms introduced by the Taxation of Pensions Act 2015
2. Inflation Index or Alphabet Soup? – An overview of inflation in UK pensions, recent changes and methods for pricing future inflation.

Outputs:

• recently published article in the Actuary on the longevity risk faced by individuals considering pensions drawdown.
• sessional paper and a workshop session at 2014 conference