The examiners are a funny bunch. In their solution to Q2 of the September 2009 paper, they write (under the heading "Disadvantages"): "The individual is taking a risk both in respect of the growth of their remaining funds and on the future movement in annuity rates." They then note the following in their comments on solutions submitted by candidates: "Some candidates lost marks because of the use of jargon such as 'terms and conditions', 'disinvestment', 'GAD', 'financial planning', 'market risk', 'negative growth', 'annuity rate', 'gilt', 'attitude to risk'." Are they having a laugh?
LOL On a more serious (and sombre) note, perhaps it just shows how the hoops we have to jump through keep changing and moving (just to keep the unlucky out). I thought I had found examples of gross contradiction in solutions, but this takes the cake by a long shot.
What else did they say in the answer about the conversion factor that changes a pot of money to an income (ie annuity factor). If it was explained then fine. The issue is whether people totally rely on jargon. So look at the whole answer when deciding when and when not things are OK. Plus of course the intended audience
Bystander, have a read of the solution yourself. If you can be bothered to argue their case, then at least have a read of what is being discussed. At no point do they define the term "annuity rate" in their solution. Even if they had explained what an annuity rate is, but not explicitly defined the term, it still wouldn't be fine so not sure what you're getting at really. In terms of the intended audience, I've taken that into account. So have the examiner's it seems, because, in their own opinion I might add, the term "annuity rate" is considered jargon! Anyway, I only pointed it out to give people a laugh. There are so many mistakes and inconsistencies in their solutions that it's hardly worth getting into a fuss over. This is merely the most utterly blatant one I've seen so far. Let's be honest, if they had read their solution (like you should have done before commenting ), they should have spotted it. They probably couldn't be bothered reading it. More worryingly, what might the markers be missing!!!
