"If the scheme were to wind up...the AAM could result in overfunding on the valuation basis (not necessarily on the winding up basis)." - could someone please clarify this statement, eg is this referring to the AL?
Hi Snowy The AASCR is quite high (compared to the SCR under other funding methods). Normally that's OK - if the employer pays relatively high contributions in the next few years it can pay relatively low contributions "later". However, if the scheme winds up in the next few years then "later" never arrives and the scheme will be overfunded on the valuation basis at the point of wind up. The wind up basis may well be different from the valuation basis. So, although there may be a surplus on the valuation basis at the point of wind up, this may not be the case on the wind up basis.
