SA4 2019 vs 2018

This post provides an overview of the similarities and differences between the SA4 courses for the 2018 and 2019 exams. More information about the 2019 course including the course structure can be found in the Subject SA4 Study Guide which can be downloaded from our website here.

Overview

The 2018 course was UK specific. However, the 2019 course is generic. So, throughout the course, general principles have been introduced and the UK specific details have either been removed or quoted as UK examples. More non-UK examples have also been added.

Our comments below are grouped using the Parts as set out in the 2019 course.

Part 1

The content of Part 1 (with the exception of the ‘Professional guidance’ chapter) has changed significantly because this part of the 2018 course contained a lot of UK specific detail. Some examples from elsewhere in the world have been added.

In addition:

• Chapter 3 is now focused solely on taxation
• the material on Integrated Risk Management (IRM) and some of the detail on funding that was in Chapter 4 has moved to be later in the course.

Chapter 5 (‘Professional Guidance’) is similar to the chapter in the 2018 course.

Part 2

Chapter 6 is a new chapter on benefit provision by the State, employers and individuals.

Chapters 7 and 8 (‘Scheme design – general’ and ‘Scheme design – specific features’) cover similar material to the equivalent 2018 chapters, although they have been extensively rewritten and updated and there is a new section in the ‘general’ chapter that provides an international perspective.

Chapter 9 is a new chapter on designing options. This replaces the 2018 ‘Scheme design – tailoring to individuals’ chapter and also contains material from the 2018 ‘Options and guarantees’ chapter.

Part 3

Chapter 10 is a new chapter which provides a holistic overview of risk. It draws together many ideas which were dispersed throughout the 2018 course and includes the material on IRM.

Chapter 11 (‘Financing benefits’) is essentially an updated version of the 2018 chapter on financing which also includes additional detail on funding and some material on insurance that was previously in the 2018 ‘Insurance’ chapter.

Chapter 12 (‘Sponsor Covenant’) chapter has changed greatly from the 2018 chapter. In particular there is new material on measurement and monitoring of covenant and interaction with other advice.

Chapters 13 and 14 (‘Investment classes’ and ‘Investment strategy’) cover broadly similar material to the equivalent 2018 chapters. However, there is some new material, for example :

• on topical investment issues in Chapter 13 (such as fiduciary management and contingent assets)
  
• on DC investment post-retirement in Chapter 14.

Part 4

Chapters 15–18 concern valuations. The equivalent material in the 2018 course was covered in Chapters 13–18. The material has been restructured and updated, but many of the underlying principles and ideas are similar.

There is no longer a chapter devoted to valuing individual arrangements.

Chapters 19 and 20 cover managing experience and analysis of experience. The material here is similar to that contained in Chapters 20 and 21 of the 2018 course.

Part 5

Chapter 21 (‘Accounting’) contains various updates but overall is similar to the 2018 accounting chapter.

Chapters 22 and 23 cover corporate activity, eg mergers and acquisitions. The equivalent chapters in the 2018 course were Chapters 24 and 25. The material has been extensively rewritten. Overall, the level of detail about the agreement and calculation of a bulk transfers has reduced and new material has been added about other events such as changes in sponsoring employers and scheme mergers.

Part 6

Chapter 24 is a new chapter which provides an overview of ways of managing risk in a pension scheme, generally by drawing together ideas presented at various points earlier in the course and reflecting upon the ‘Risks’ chapter from earlier in the course. Many of the underlying ideas were contained in the 2018 course.

Chapter 25 is a new chapter on incentive exercises. Many of the ideas were previously contained in the ‘Options and guarantees’ chapter of the 2018 course, which has now been removed.

There is no longer a chapter devoted to insurance. Instead, much of this material is contained in other chapters of the 2019 course.

Chapter 26 (‘Discontinuance’) is similar to the equivalent chapter in the 2018 course.