Factors review
GAD will shortly be updating Factor Guidance Notes for public service pensions schemes. It follows completion of a major actuarial factors review project.
Credit: Shutterstock
We will shortly be updating Factor Guidance Notes for 26 public service pension schemes which will help administer the benefits. This follows the completion of a major project where we reviewed and updated approximately 500,000 actuarial factors across those pension schemes.
Actuarial factors are important as they are used by administrators in member calculations. They can affect the flow of money to and from members, such as early retirement benefits or the purchase of additional pension.
Changing circumstances
We recommend that factors are reviewed whenever new information is available that could significantly change existing factors. The recent update incorporated new information on:
- the SCAPE rate
- assumptions about future member events, such as rates of mortality
- UK-wide population projections
Cross team working
We set up streamlined processes to calculate and check new factors and we focussed heavily on automation to reduce the risk of human error. These processes meant we could deliver the most important factors to our clients as soon as possible, and that factors for all 26 schemes were delivered to similar schedules.
We hosted regular Factor Implementation Groups with scheme representatives to discuss progress and facilitate cross-scheme discussions on technical issues. We also updated the style of our written communications to be clearer and easier to understand.
In our end of project survey, clients praised our new factor bulletins and the ease of getting in touch with GAD, with the majority saying we exceeded or significantly exceeded their expectations.