Elizabeth, thanks for the response.
I'm not sure what the salary increases for actives and 100%/90% adjustment for pension payments have to do with each other.
The former is an adjustment for current active members (who will be active for a while) earning salary increases as time goes by. When you do a discontinuance valuation in the future you have to take account of actual salaries at that point (which should have increased by then).
The latter is an adjustment to reflect that even if you fund for 90% you still have to actually pay 100% of benefits. If I rememer correctly, the current pension payroll was around £1 m, so the 10% "shortfall" over 10 years is around £1m (1*10*10%), ignoring effects of new pensioners, pension increases and discounting.
I'm not too concerned with the actual calculations, since I think have a good feeling of what should happen (in real life we'll do it a little less approximatly with a computer). The problem I face is knowing how to interpret what the examiners want (I would have ignored the absolute value of SCR contributions here and possibility the fact that it's increasing and spent more time on solvency level) and when to use (and what) approximations you can use and when to spell out your assumptions(eg they just said "use 1m say for 100%/90%adjustment" here, all while balancing time.
Last edited by a moderator: Sep 22, 2009