A Critique of Pensions Review Calculations: Funding Values & Market Values
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Document ID: 2001-811 (previously Report 60)
Published on: 31st August 2001
The Pensions Review uses traditional actuarial funding methods to set ‘redress payments’ for individuals who have been mis-sold pensions. In principle, these payments are intended to compensate the individual for any financial claims they forego. In this note we argue that the assumptions used in the calculations mean that the values placed on pension assets fall well short of their economic values. As a consequence, users should continue to be wary of actuarial values when they assess pension transfer values and ‘redress payments’ for past mis-selling.
