IFoA SP4 study guide
IFoA SP4 · Work through your exam, one topic at a time.
SP4 (Specialist Principles: Pensions) is one of the Institute and Faculty of Actuaries' Specialist Principles subjects, taken after the Core Principles stage and typically alongside or before a Specialist Advanced subject. It suits actuaries working in, or moving into, occupational and individual pension provision: scheme actuaries, consultants, in-house pensions managers, investment and risk specialists, and those involved in accounting disclosures or scheme restructuring. The IFoA SP4 study guide has 8 sections and about 2,401 words.
01Pension scheme design, benefits and types of scheme
Pension scheme design determines the promise made to members, who bears the risk, and how cost is shared. SP4 tests whether you can describe DB, DC and hybrid structures, apply benefit formulae, and explain the consequences of a design choice for members, sponsors and the funding basis.
325 words, about 2 min02Funding, valuation and financing of pension schemes
Funding is the process of setting contributions and investment strategy to meet DB promises as they fall due. The exam tests the statutory funding framework, prudent assumptions, the employer covenant, and how deficits are repaired.
306 words, about 2 min03Investment strategy and asset-liability management for pension schemes
Investment strategy must be consistent with the liability profile and covenant. SP4 tests ALM, duration, hedging, liquidity and de-risking, including the lessons of the 2022 LDI collateral crisis.
257 words, about 1 min04Risk management, governance and regulation of pension schemes
Governance and regulation determine how schemes are run and how risks are controlled. The exam tests trustee duties, TPR's powers and codes, integrated risk management, covenant assessment, notifiable events and breach reporting.
295 words, about 1 min05Accounting for pension costs and disclosure
Accounting for pensions is about recognising the cost of DB promises in employer financial statements. The exam tests IAS 19 and FRS 102 mechanics, the split between profit or loss and OCI, and disclosure.
304 words, about 2 min06Individual and state pension provision, retirement products and decumulation
This domain covers the state pension, private provision and decumulation. The exam tests the new State Pension rules, auto-enrolment, and the tax and product rules for taking benefits.
304 words, about 2 min07Pension scheme restructuring, benefit change and wind-up
Restructuring and wind-up involve changing benefits or ending a scheme. The exam tests s67 protection, employer debt, PPF entry and buy-out, plus the moral hazard regime.
316 words, about 2 min08Professional and ethical considerations in pensions practice
Professional and ethical standards underpin pensions work. The exam tests the Actuaries' Code, conflicts, reporting duties and the line between client instructions and the public interest.
294 words, about 1 min