Amount by which the actuarial valuation of a pension scheme’s assets is less than the actuarial liability.

For FSMA purposes, it is a firm (including a sole practitioner) that is managed and/or controlled by individuals who are members of the Institute of Actuaries or Faculty of Actuaries and who are entitled to practise the profession of actuary (typically a consulting firm). Actuarial firms that carry on regulated activities must either become an authorised professional firm to carry on regulated activities, or apply to the Institute for a designated professional body (DPB) licence. The activities are then classed as exempt regulated activities as set out in the DPB Handbook as they are incidental to the firm’s professional services.

A required FSA function. See APPOINTED ACTUARY.

The extra pension granted to a pension scheme member who has deferred his pension beyond normal retirement age.

The amount, using actuarial assumptions and methods, a pension scheme will have to pay out as pension benefits and expenses after the date of the actuarial valuation. It includes the present value of instalments of pensions in payment and related contingency benefits, the present value of future payments in respect of deferred pensioners and a provision for all active members.

The reduction in a pension scheme member’s accrued pension benefits because he has retired early. The reduction helps to cover the additional costs brought about by early retirement.

A report in the format required by the FSA on an actuarial valuation. The name is also used when an actuary reports how changes to a pension scheme might affect it financially.

Statement required by the Disclosure Regulations to be included in the annual report. It must show, in the prescribed form, the security of the accrued and prospective rights of pension scheme members and be signed by an actuary. See DISCLOSURE 1.

The excess of the actuarial valuation of a pension scheme’s assets over the scheme’s actuarial liability.

The value, following actuarial practice, placed on the assets of a pension scheme, for the purpose of the actuarial valuation. It could be an assessed value, the market value or some other value.