Following recent court cases we’ve been considering the action we need to take to address the judgments and, where appropriate, we have updated the Q&As which we published in December 2018 . We’re aware that actuaries need to determine how to reflect the impact of these judgments in new s179 valuations which will be used to calculate schemes’ levy invoices for 2020/21.
Following the judgment in the Hampshire case by the European Court of Justice , what level of compensation should be taken into account in s179 valuations?
For now, valuations should continue to be carried out under the current s179 guidance, G8, and no additional allowance should be made as a result of the Hampshire judgment. This is our interim position and will be reviewed as we work through the impact of the judgment.
Following the judgment in the Beaton case, what level of compensation should be taken into account in s179 valuations?
Schemes should take account of the effect of the judgment on the valuation of the schemes’ protected liabilities.
Does the Lloyds judgment mean that GMP equalisation and the application of the statutory underpin needs to be taken into account in s179 valuations?
New s179 valuations with effective dates in December 2018 or later should include an allowance for additional liabilities arising as a result of the Lloyds judgment . We recognise the interim difficulties in calculating such allowances and providing the necessary certifications and have published an information note to assist actuaries in the process.
When certifying DRCs under Option Alpha should actuaries treat the additional compensation payable as a result of the Hampshire, Beaton and Lloyds judgments as an augmentation?
For the 2020/21 levy year it is not necessary to treat the impact of the Hampshire, Beaton and Lloyds judgments as an augmentation when certifying DRCs under Option Alpha.
Will you be adjusting s179 valuations to take account of the Hampshire, Beaton and Lloyds judgments?
For the 2020/21 levy year we will not be adjusting s179 valuations to take account of the Hampshire, Beaton and Lloyds judgments.
If you have any further questions about how the impact of these judgments please contact us on 0345 600 2541 or email [email protected].
Published: September 2019