Important Points for IC 83 - Group Insurance and Retirement Benefit Schemes Exam
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In Accrued benefit methods the Actuarial Liability for active members is based on pensionable service accrued up to the valuation date or to the end of the Control Period, as appropriate.
The prospective methods are driven by the contribution rate and the accrued methods are driven by the funds.
The funding method can be chosen by assessing the following basis: Security, Stability, Realism an Flexibility.
The benefit provided to the employee in the Defined Contribution Scheme is not known in advance and it will depend on : the contributions that are paid, the investment returns on the funds in the period before retirement and the cost of buying a pension as retirement.
The Ccontribution rates for a Group Defined Contribution scheme may be set up by targeting a particular level of benefits. For example 1/80th of final salary for each year of service.
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