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ST4 April 2013 Q1 (ii)

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almost_actuary

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Hello! I’m just looking at projecting the deferred liabilities in this question to 1 January 2013. Deferred liabilities given at 1 January 2010 are £20m, average deferred revaluation is 3% pa and interest rate is 6% pa.

The acted answer for deferred liabilities is 20 * (1.06)^3 = £23.8m

How come deferred revaluation isn’t used in this answer?

Thanks for any help!
 
This is frequently asked (and sadly misunderstood!). Nothing needs to be done about deferred revaluation.
Revaluation to retirement will have been included in the liabilities - so no need to make any adjustments.
All that is needed to roll forward a closed group of members' liabilities is to unwind discounting.
 
Stuart Underwood said:
This is frequently asked (and sadly misunderstood!). Nothing needs to be done about deferred revaluation.
Revaluation to retirement will have been included in the liabilities - so no need to make any adjustments.
All that is needed to roll forward a closed group of members' liabilities is to unwind discounting.
Click to expand...
Thanks so much for your quick response!
 
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