• We are pleased to announce that the winner of our Feedback Prize Draw for the Winter 2024-25 session and winning £150 of gift vouchers is Zhao Liang Tay. Congratulations to Zhao Liang. If you fancy winning £150 worth of gift vouchers (from a major UK store) for the Summer 2025 exam sitting for just a few minutes of your time throughout the session, please see our website at https://www.acted.co.uk/further-info.html?pat=feedback#feedback-prize for more information on how you can make sure your name is included in the draw at the end of the session.
  • Please be advised that the SP1, SP5 and SP7 X1 deadline is the 14th July and not the 17th June as first stated. Please accept out apologies for any confusion caused.

Sep03 Q2 (i)

S

Snowy

Member
"Selection risk - since scheme's standard benefits only provide a pension for member, the take-up of the option to provide dependant's benefits is likely to be quite high - this reduces need to adjust assumptions to reflect risk of selection."

- Why does this reduce the need to adjust assumptions to reflect the risk of selection?
 
Selection is essentially the case where those who benefit more (than average) take the options and those who benefit less (than average) don't.

To allow for selection means adjusting the assumptions to suit those taking the option rather than the average for the population.

If almost everyone takes the option however, there really isn't much selection.
the experience of those who "selected" is the same as the population as a whole.
 
You must log in or register to reply here.
Back
Top