Q.A pension scheme provides an ill-health retirement pension of 1/80 of Final Pensionable Salary for each year of company service limited to a maximum of 50% of Final Pensionable Salary, with fractions of a year to count proportionately. Retirement due to ill-health may take place at any time before age 65 the normal retirement age. Final Pensionable Salary is defined as the average annual salary over the three-year period preceding retirement. Calculate the present expected value of past and future service ill-health benefits for a male now aged 30 exact who has a current salary of £30,000 per annum and has 10 years past service. His salary will increase in 1 year’s time. Basis: PEN Tables in the Formulae and Tables for Actuarial Examinations – Interest 4% per annum [4] Can anyone explain how to include that 50% in the solution?
