Related provisions for MCOB 6.8.4
When a firm compares the benefits likely to be paid under a defined benefits pension scheme with the benefits afforded by a personal pension scheme or stakeholder pension scheme (COBS 19.1.2R (1)), it must:
- (1)
assume that:
(a) the annuity interest rate is the intermediate rate of return appropriate for a level or fixed rate of increase annuity in (2COBS 13 Annex 2 3.1R(6))2) or the rate for annuities in payment (if less)
(b) the retail prices index is
2.5%
(c) the average earnings index and the rate for section 21 orders is
4.0%
(d) the pre-retirement limited price indexation revaluation is
2.5%
(e) the post-retirement limited price increases at
2.5%
(f) the index linked pensions rate is the intermediate rate of return in 2COBS 13 Annex 2 3.1 R (6)2 for annuities linked to the retail prices index;
or use more cautious assumptions;
- (2)
calculate the interest rate in deferment; and
- (3)
have regard to benefits which commence at difference times.