Approaches to smoothing vary significantly across the industry, and it is quite common for different smoothing strategies to be applied to different funds within the same firm.

Milliman consultants have conducted a survey of the different methodologies applied across a broad sample of UK with-profits funds. As well as presenting the results of this survey and looking at the smoothing costs that could arise under some of the most common approaches, this paper looks at the important factors to consider when reviewing the ongoing appropriateness of such an important area of discretion.