[discount_rates_problem] [professionalism]

Following the Morris review of the UK actuarial profession (2005), the FRC became responsible for the technical actuarial standards (“TASs”), professional matters remaining controlled by the profession. A new TAS regime was implemented from July 2017, the target being the delivery of appropriate advice as opposed to being about regulations. Two points are particularly interesting.

First, definition [3.2] of the Framework Reliability Objective (updated in 2019) requires transparency of assumptions together with the communication of any inherent uncertainty.

Secondly, TAS 300 (pensions) requires (paragraph 8 on page 5) that actuarial communications shall explain comparisons between the discount rates used (or proposed) against the expected assets return according to the stated strategy; the same TAS also requires that the degree of prudence be identified.

Scalar assumptions or results cannot comply with the above.