THE LIABILITIES ARE THE FUTURE CASH FLOWS
The Pension Regulator's guidance on scheme funding stated that the liabilities of the pension scheme, ie the projected future cash flows, can be valued in one of two ways. Most actuaries start with, and in some cases are unable to move away from, an approach based on gilt yields. We start with the second approach under the guidance and look to see what level of returns might be expected from the scheme's investments.
We can carry out all the actuarial duties required for a scheme in order to satisfy the relevant legislation and meet trustee requirements.
We are also able to complete all the necessary calculations for company accounting required under IAS19 and FRS17.
If you are involved in any corporate activity, whether buying or selling, you cannot ignore the issue of the pension scheme - as we have seen in recent high profile cases. Often the pension liabilities are the most financially significant aspect of the total deal. We have significant experience in this area, and many clients have been grateful for our ability to meet tough timescales, as is frequently required in the hectic run up to completion of a corporate deal.