Regular valuation and SFO valuation

The notes seem to treat the regular valuation (for Disclosure regulations purposes) and the SFO valuation separately and then admit later that in practice the SFO basis is normally used for the regular valuation.

I note that in the Solutions to Assignment X3 Q3, the implicit assumption is that a regular valuation will use the method and assumptions of the SFO.

Can anyone give me a clear explanation of this weird reality? Is there just one valuation wearing two hats, are the notes misleading me or are the Solutions simplifying a more subtle reality?

Thanks!

 

Although I'm not an expert, to my mind the SFO is the valuation needed for disclosure purposes, as it's the statutory requirement.

Not sure what you mean by "regular", and one interpretation may be the valuation required by a Scheme's specifc rules. Another reason for a valuation may be to set the contribution rate, which can be different from the SFO (one example is the SFO can be a solvency test (I think) and you need an ongoing valuation to fund it).

In practice, the two are likely to be one and the same, because it's simpler to just do one valuation, and the contribution rate is determined (partially) by the SFO requirements.

However, it is important to be always mindful of the purpose(s) of any valuation, and sensible to refer to a valuation in the proper context (if there is possible ambiquity)