FAB (First Actuarial Best-Estimate) Index
FAB (First Actuarial Best-estimate) Index
The FAB Index shows the financial position of the UK’s 5,131 DB pension funds on a long-term basis, allowing for realistic future investment returns.
It is updated every month using data from the PPF 7800 Index, to help trustees better understand the likely value of fund liabilities.
FAR (First Actuarial Return) Index
The FAR Index shows the rate of return needed for the UK’s 5,131 Defined Benefit pension schemes to be fully funded in aggregate.
It shows the relatively low rates of return that are needed, both in absolute terms and relative to inflation.
While liabilities calculated on a best-estimate basis aren’t suitable for scheme funding, we believe that trustees need this information, along with the buy-out solvency position, before they can arrive at a sensible value for funding.