This is because our previous technology platform and our new system use different annuity basis assumptions for the Pension Annual Benefit Statement (PABS). This forecast is required by the regulators and is also known as the Statutory Money Purchase Illustration (SMPI).
The annuity basis for the previous system was:
- Monthly in advance for a minimum period of 5 years
- Increasing in line with the increase in the Retail Price Index
- Assuming a spouse’s pension of 50%
The default annuity basis for the new system is:
- Monthly in advance for a minimum period of 5 years
- Does not increase or have any spouse’s pension
This default annuity basis can result in the forecast annuity being much higher than an annuity that is assumed to be increasing and includes a spouse pension.
If you wish to change the annuity basis for future SMPIs, you can do this by clicking ‘Pension Details’ on the uncrystallised CRA sub-account, and then edit annuity assumptions fields:
- Annuity payments in
- Pension increases
- Guaranteed period
- Spouse's pension