1 / 15

FRS17/IAS19 Sensitivities

FRS17/IAS19 Sensitivities. JPR TRUSTEE SERVICES LIMITED. Who is this presentation for?. Directors of businesses who sponsor a defined benefit (DB) pension scheme Directors (or equivalent) of businesses or organisations who employ people who have DB pension rights from that employment

leena
Télécharger la présentation

FRS17/IAS19 Sensitivities

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. FRS17/IAS19 Sensitivities JPR TRUSTEE SERVICES LIMITED

  2. Who is this presentation for? • Directors of businesses who sponsor a defined benefit (DB) pension scheme • Directors (or equivalent) of businesses or organisations who employ people who have DB pension rights from that employment • Trustees of DB pension schemes • Auditors of businesses with DB liabilities

  3. The actuarial valuation: knowledge and understanding • It takes many years of training to become an Actuary • Trustees and directors are not expected to be experts • Trustees are expected to have ‘knowledge and understanding’ • The ‘4 box method’ is a simple representation of an actuarial calculation • Use: • Deferred member • Simplifies the example • Consider long term liabilities as this highlights key sensitivities

  4. 4 box method: our member • Our deferred member: • Age 45 • Married Spouse 3 years younger • Accrued pension £10,000 pa • Normal Retirement Age 65

  5. 4 box method: 3 Core assumptions • Life expectancy Male age 65: 23 years + 6 years spouses pension • Inflation: • Market Implied Inflation 3.50% • RPI 3.20% • CPI 2.20% • Discount Rate (Return) 4.70%

  6. 4 box method: calculating the liability

  7. 4 box method: increase return to 5.0%

  8. 4 box method: calculating the liability

  9. 4 box method: decrease inflation by 0.2%

  10. 4 box method: calculating the liability

  11. 4 box method: decrease life expectancy by 1

  12. 4 box method: calculating the liability

  13. 4 box method: all 3

  14. 6 things to remember • Best estimate • Auditors • Directors • Life expectancy • Inflation • Discount rate

  15. jonathan@jprts.com www.jprts.com

More Related