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NAPF welcomes delay to longevity changes
The National Association of Pension Funds (NAPF) has welcomed the Pensions Regulator's decision to postpone changes on how longevity is treated in pension scheme funding regimes.
The regulator announced yesterday (21 July) that, following responses to its longevity consultation, it had decided to delay the introduction of the need for pension scheme valuations to show greater recognition of longevity improvements.
Changes will not now apply until the beginning of the next defined benefit (DB) scheme valuation cycle starting in September, not March 2007
Nigel Peaple, NAPF Director of Policy, said: "We welcome the decision to avoid the retrospective application of changes to the regulator's expectations in this area.
"It would have been costly for trustees of pension schemes to revise valuation mortality assumptions where they had already started work on funding plans. This was one of the key issues we raised so we're pleased that the regulator is listening to its stakeholders."
The regulator issued a consultation in February this year seeking views on how it expects pension schemes to take account of future improvements on longevity. This had suggested introducing changes applying to valuations due from March 2007.
In its submission to the consultation, the NAPF raised several concerns, including that the long cohort projection for the 'mortality improvement' assumption would be seen to be a minimum standard by trustees, even though it is not appropriate for all schemes.
