Changes to statutory projections
Changes to statutory projections for Defined Contribution (DC) and PRSA (Personal Retirement Savings Accounts)
New investment growth rate assumptions have come into effect from 1 October 2017. The changes are made in line with revised guidance from the Society of Actuaries in Ireland.
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Summary of ChangesLong term growth rates There are no changes to the long term growth rates. Short term growth rates For short term projections however, the prevailing yields on the underlying assets need to be taken into account. The approach to take is not prescribed. The interpretation of how best to apply the revised guidance falls to the projection provider. |
In practice this will mean the following for projections prepared by Corporate Business:
- From 1 October, we reduce the future rates of annual investment return we use in projections for cash and bonds assets for projections of less than five years. This reflects the current low levels of yields on these assets.
- For projections of between five and ten years, we use a blended return of the long term and short term rates.
