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SP4 - contribution rate v/s contribution level

B

Bharti Singla

Senior Member
Hi, I have seen two questions which seem similar to me but their solutions are quite different.

Ch6 - Q6.7 talks about factors to be taken into account in setting an appropriate contribution structure for the scheme for a DC scheme.

IAI - Sept 2018 - Q5(iii) talks about factors to consider before making recommendations on the contribution rates for a DC scheme.

When I read these question 6.7, I thought same points can be written as given for sep18 question. But the solution is very different for both. Could anyone please explain the difference between these two questions?
 
A key reason for the differences in the solutions is differences in the questions. For example, in the Ch 6 question we are told that the DC scheme is to target a pension of 100th of final salary for each year of service. Therefore, points about determining the target level of benefits won't be relevant here (unlike in the IAI question and solution) .

Best wishes

Gresham
 
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