The AA method is often considered suitable for schemes that are closed to new entrants because, although the AASCR tends to overfund the scheme, if the surplus that emerges is spread over the future working lifetime of the aging membership (and assumptions are borne out by experience etc etc), then the MCR will be stable.
The AA method may also be considered suitable for small schemes, because if there are very few active members, the average age of the membership may also increase over time (because, for example, although the scheme technically is not closed to new entrants, there may not actually be any new entrants).
Last edited: Sep 17, 2012
