COBS 19 Annex 6 Value data requirements

1Money purchase benefits

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1

This section sets out the value data required in relation to a relevant pension scheme member with money-purchase benefits.

1.1

Subject to 1.2, the value data to be provided is:

(1)

an accrued pension pot value;

(2)

an annualised accrued pension value, prepared using the methodology set out in the relevant pension guidance, less the elements regarding future contributions and growth and calculated as if the relevant pension scheme member has reached their retirement date on the illustration date;

(3)

if held, a projected pension pot value, prepared using the methodology set out in the relevant pension guidance; and

(4)

an annualised projected pension value, prepared using the methodology set out in the relevant pension guidance.

1.2

The value data in 1.1(2) to 1.1(4) need only be provided once a pension illustration has been given after 1 October 2023.

1.3

Before 1 October 2023, and between 1 October 2023 and a firm producing a pension illustration, a firm may provide the value data referred to in COBS 19 Annex 6 1.1R(2) to 1.1R(4) on a voluntary basis, but if it does, it must use the version of the relevant guidance available at the illustration date.

Non-money purchase benefits (other than cash balance benefits)

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2

This section sets out the value data required in relation to a relevant pension scheme member with non-money purchase benefits, other than cash balance benefits.

2.1

In respect of an active pension scheme member, value data required is:

(1)

an accrued pension value calculated in accordance with the relevant pension scheme’s rules, valued to the illustration date as if the relevant pension scheme member has reached their retirement date on the illustration date and without regard to possible increases in earnings;

(2)

a projected value calculated in accordance with the relevant pension scheme’s rules and without regard to possible increases in earnings, that would be payable from the date benefits are payable if the relevant pension scheme member was to cease to accrue benefits in the relevant pension scheme on reaching their retirement date.

2.2

In respect of a deferred pension scheme member or a pension credit member:

(1)

a firm must provide an accrued pension value calculated in accordance with the relevant pension scheme rules and valued to the illustration date, as if the relevant pension scheme member has reached their retirement date on the illustration date; or

(2)

a simplified accrued pension value calculated using a method of adjustment which the firm considers to be appropriate and valued to the illustration date and as if the relevant pension scheme member has reached their retirement date on the illustration date, where each of the following conditions applies:

(a)

no more than 2 years has passed since the firm has connected to the MaPS dashboards digital architecture;

(b)

a value in accordance with (1) above could not be provided within the timescales required under COBS 19.11.29R(2) without disproportionate cost and within a reasonable time; and

(c)

the firm is content that the simplified accrued pension value in (2) is an appropriate representation of the value of the benefits.

(3)

A firm in 2.2(2) may consider it to be appropriate to use rates of inflation as part of the method of adjustment.

2.3

(1)

The value data described within this section may be provided as an income or a fixed lump sum or both, where a fixed lump sum is the actuarial value of a benefit which is designed to be taken as a lump sum.

(2)

Where the value data set out in 2.1 and 2.2 is comprised of tranches, a firm must provide:

(a)

whichever of the following it considers would provide the best representation of the benefit:

(i)

a combined value covering all the tranches of benefit, along with a single common retirement date; or

(ii)

a separate set of values for different combinations of tranches of benefits, along with a retirement date in relation to each; and

(b)

in accordance with the pensions dashboard standards on data, an explanation of the circumstances in which a benefit referred to may cease or reduce from a certain age.

Cash balance benefits

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3

This section sets out the value data required in relation to a relevant pension scheme member with cash balance benefits.

3.1

In respect of an active pension scheme member, the value data required is:

(1)

an accrued pension fund value calculated in accordance with the relevant pension scheme’s rules valued to the illustration date and without regard to possible increases in earnings;

(2)

a projected pension fund value calculated in accordance with the relevant pension scheme’s rules and without regard to possible increases in earnings, that would be payable from the date benefits are payable if the relevant pension scheme member was to cease to accrue benefits in the relevant pension scheme on reaching their retirement date;

(3)

an annualised accrued pension value, which is:

(a)

based on the accrued pension fund value referred to in (1) above; and

(b)

prepared using the methodology set out in the relevant pension guidance, less the elements regarding future contributions and growth and calculated as if the relevant pension scheme member has reached their retirement date on the illustration date; and

(4)

an annualised projected pension value which is:

(a)

based on the projected pension fund value referred to in (2) above; and

(b)

calculated in accordance with the relevant pension guidance, less the elements regarding future contributions and growth.

3.2

In respect of a deferred pension scheme member or a pension credit member, the value data required is:

(1)

an accrued fund value which is calculated in accordance with the relevant pension scheme’s rules and is valued to the illustration date; and

(2)

an annualised accrued pension value based on the relevant pension scheme rules and calculated as if the relevant pension scheme member has reached their retirement date on the illustration date.

Hybrid benefits

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4

This section sets out the value data required in relation to a relevant pension scheme member with hybrid benefits.

4.1

In respect of a relevant pension scheme member with hybrid benefits, the value data required is that which the firm considers best represents the value of the relevant pension scheme member’s benefits under the scheme, calculated in accordance with what the firm considers to be the appropriate methodology from COBS 19 Annex 6 1R to COBS 19 Annex 6 3R above and indicating which methodology it has applied to the calculation for each benefit.