Hi, I am not sure what is pension deficit in a DB scheme. Question1: Does deficit happen when expected present value of benefit and expense > expected present value of contribution and investment return ? Question2: If the funding level is less than 100%, will the DB scheme have to be in deficit?
Hi uktous A pension scheme is said to be in deficit when the value of the actuarial liabilities exceeds the value of the assets. There are a number of different ways of assessing the liabilities (and also the assets). The funding level is calculated as: Value of assets divided by value of liabilities. So, if the funding level is less than 100%, liabilities are larger than assets and so the scheme is in deficit
Hi, Currently, is there any regulation on funding level? Eg, funding level should not be lower than 80%. Thanks
