Regulatory Alerts2020-06-10
FSCA Communication 33 of 2020 (RF) – Minimum Individual Reserve Assumptions for Defined Benefit Pension Funds
The Financial Sector Conduct Authority requires defined benefit pension funds to adjust their minimum individual reserve assumptions to align with current market yields at the member exit date. Fund boards must apply up-to-date bond yields using the same capitalisation methodology as their last accepted statutory actuarial valuation, ensuring fund protection and member fairness during periods of high market volatility. This guidance permits funds to update assumptions immediately rather than waiting for a new statutory valuation report, thereby maintaining accurate reserve calculations under fluctuating market conditions.
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