Pension Protection Fund, London, is seeking input on new valuation assumptions for pension funds of insolvent companies to help them take advantage of lower pricing in the bulk annuity market.
The lifeboat fund for pension funds of insolvent U.K. companies said Monday the changes would take effect April 1 and are expected to ensure that the funds of insolvent companies that end up in the PPF can secure higher benefits for its participants above the PPF levels.
Among the changes the PPF, which has £39 billion ($47 billion) in assets, is proposing a yield curve approach when assessing plans for entry to the PPF to assess liabilities more accurately.
Other proposed changes include increasing discount rates for certain types of benefits, moving to the latest mortality projections model, and amending the calculation of expenses.
PPF is focusing on understating liabilities for certain valuations to allow participants to obtain better benefits.
The consultation will close Feb. 20. Contributions should be sent via email. to the PPF.