Hi I'm trying to blitz my way through calculation questions and was hoping someone could provide me with a list of valid rules of thumb to be used. (eg for every 1% increase in discount rate assume the liabilities drop by about 14%, or ax+1 / ax = 2%) Thanks!
I think you've picked up the main rule of thumb. Perhaps worth remembering that if a 1% change in post-retirement net rate leads to a 14% change in liability for non-pensioners, then the same change in net rate is likely to lead to a smaller change in liability for current pensioners. Recently the examiners have assumed that pensioner liabilities would change by 12% for a 1% change in net rate.
