Changes to statutory money purchase illustrations expected

Schemes may need to change how they calculate their statutory money purchase illustrations (SMPIs).  This may mean tweaking member communications.

The Financial Reporting Council (FRC) has proposed changes to its technical memorandum that sets out how SMPIs have to be produced.  It is looking to standardise the assumptions used.  This is because, in order for Dashboards (see item 1. above) to be able to maximise member engagement, illustrations from different schemes will need to be consistent so as to be more easily compared.

If the proposals are confirmed, trustees may want to check with their SMPI providers that the illustrations will be updated in line with the new guidance and in good time for use in annual statements and on the Dashboard. They should also consider what (if anything) to communicate to members about this in order to reassure members and pre-empt queries if the illustrations will be changing.