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The Department for Work and Pensions (DWP) has a model called Ipen that produces state and private pension outcomes for hypothetical individuals or couples.
The DWP commissioned the Pensions Policy Institute (PPI) to validate Ipen against the PPI’s Individual Model (IM). The PPI’s IM is a model developed by the PPI to project incomes in retirement for hypothetical individuals and couples.
The validation process involves comparing the results of the two models under a number of different scenarios and checking whether the results are similar. While no feasible set of scenarios can be exhaustive, a validation process of this type can help to provide confidence in the model’s methodology.
This project concentrates on validation of the methodology of Ipen. No implicit or explicit validation has been undertaken of the assumptions used within Ipen for this exercise or any other DWP analysis that uses Ipen.
The validation process involved comparing the results of Ipen with the PPI’s IM under a number of different scenarios and checking whether the results are similar. The PPI have found that, given the same set of assumptions, and subject to a small number of methodological differences, the results produced by Ipen, are similar to those produced by the PPI IM. The PPI validation extends only to the methodology used in Ipen, and does not validate the underlying assumptions or the use to which those results are put, and does not serve as a check on published figures.
Please click here to download the report.
Please click here for further information on the PPI Models.