Hello Before insurance Irrespective of whether the scheme insures DIS pension based on accrued or prospective service, should the SCR calculation not remain unchanged under both the circumstances? Because PUSCR is calculated over the control period and has nothing to do with past or future service? Thank you
The PUSCR is the contribution rate that needs to be paid to reflect the cost of benefits over the control period. Before insurance this will allow for an element of the spouse's death in service pension and in practice there could be various approaches e.g. an estimate of the value of the spouse’s death in service pension which might be taken to accrue in the future based on the expected value of the prospective benefit minus the past service element of the benefit that has been allowed for in the PUAL. After the spouse’s death in service pension is insured, it is likely that no allowance for this benefit will be made in the PUAL and the actual cost of the insurance will be added as an annual premium to the SCR.
