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September 2017 Q5iii

Discussion in 'SP4' started by LloydieW1990, Sep 6, 2018.

  1. LloydieW1990

    LloydieW1990 Member

    Hello

    The examiners report to this question includes capping salary at a low level. I can understand why this would result in savings to the overall cost of provision (smaller pensions) but would this actually reduce the SCR from part ii, given that salary is included in both the numerator and denominator of the SCR and so cancels out? The same goes for changing the pensionable salary definition or averaging over a period.

    Thanks in advance!

    Lloyd
     
    LloydieW1990, Sep 6, 2018
    #1
  2. Stuart Underwood

    Stuart Underwood Member

    The salary is capped for the benefits - in the numerator, but not for the contributions - in the denominator, so they don't cancel out.
     
    Stuart Underwood, Sep 7, 2018
    #2

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