There are two approaches, labelled “MtM” and “Off”, respectively corresponding to “mark to market” and “off market” (the latter formerly called smoothing).

MtM Assumption  For fixed benefits, the discount rate is the yield on long-term conventional gilts. For index-linked benefits, the yield on index-linked gilts is used for the “blend” period alone. Otherwise, it is the conventional gilt yield, adjusted to allow for the same long-term rate of inflation as for off-market. While simplistic, it is not only simple but also not that far away from what broadly tends to have been assumed.

Off Assumption  For equities and bonds,  the expected return is estimated as a multiple of the initial yield. However, I have used random numbers rather than scalars, with mean{standard deviation}of  2.34 {0.55} for equities and 1.06 {0.23} for conventional gilts. For ILGs, I am still using “yield + expected long-term inflation + 1%” (taken from www.ukrpi.com). That means that the Off assumption will always be 1% higher than for MtM, for index-linked cases for ILGs (where included in the assets).The historical results are charted here.