Updated actuarial factors
GAD has updated actuarial factors for key public service pension schemes. Actuarial factors are used to calculate the benefits of scheme members under different scenarios.
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The Government Actuary’s Department (GAD) has updated important actuarial factors for 25 public service pension schemes.
The schemes covered include those for firefighters, police officers, teachers, NHS staff, local government employees and civil servants.
Actuarial factors
Actuarial factors are used to calculate and adjust the benefits of scheme members under different scenarios.
Examples include calculating the value of benefits when a member divorces, or the value of what a member receives when they transfer-in existing pensions from previous employers.
Basis updated and new factors delivered
On 29 March 2023 the government informed public service pension schemes that they would be changing the basis used to calculate Cash Equivalent Transfer Values (CETVs) and other related calculations. As a result, pension schemes were required to suspend some calculations until GAD provided updated actuarial factors.
On 27 April 2023 the government confirmed the new basis to be used for CETVs and related calculations giving GAD the information we needed to proceed calculating and issuing updated factors.
By Friday 26 May 2023, updated factors for suspended CETV and divorce cases had been issued to most public service pension schemes.
By 30 June 2023 factors for suspended transfer-in cases had also been issued.
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Calculations to be restarted
Since receiving the updated factors, pension scheme administrators have been working hard to implement them and restart the calculations that were suspended.
This is an important step and includes updating and testing administration systems with the new factors to make sure that benefit calculations are correct.
Actuary Daniel Sirl is GAD’s lead on the factor updates. He said: “Producing these factors quickly has been important for my team as we want to limit the time members spend waiting for calculations to be processed. I’d like to thank my team, the scheme managers, and the administrators for their hard work.”