Question is how will the experience investigation of an occupational pension scheme not be valid anymore. One of the answers is the individuals may be subject to different tax treatment and therefore have different preferences for certain benefits. Is this talking about withdrawal experience? He/she may not prefer it and hence withdraw from the occupational scheme and invest elsewhere where the tax benefits are higher?
Hi - yes, the decision as to whether to continue membership of the scheme or not may depend on tax treatment of occupational pension schemes relative to other savings options. Therefore if the balance of membership shifts in terms of tax status (or if tax rules change) then the withdrawal rates seen within historic experience may not reflect likely future experience. If there are different forms of withdrawal benefit available, then the balance of choice of which form is taken could also vary similarly. Thinking more widely, the decision as to whether or not to join the scheme in the first place (if voluntary) could also depend on tax treatment/status. And if there is any member choice as to the type or level of benefits (including whether lump sum or income is taken, where this an option), these choices may also be partially driven by tax considerations. Hope that helps.
