Can anyone please tell me what this sentence means...it comes from the section regarding Statement of Funding Principles: "the trustees' policy regarding the reduction of cash equivalents to reflect any underfunding of the scheme"... thanks!
Barney In the UK, the trustees have the right to pay reduced transfer values (i.e. a value less than the value calculated on the transfer value basis) from the scheme to reflect the scheme's funding level. This might happen if the scheme was underfunded - especially if the scheme is underfunded on the transfer value basis. Whether the trustees decide to pay full transfer values or reduced transfer values, this affects the funding of the scheme, so it needs to be flagged up in the SFP.
