ERM For Pension Funds and sponsors [8]

Go to: Summary | Previous | Next   
Bullet points include: Illustrative DB Final Salary Scheme, closed to new accrual, no discretionary benefit increases, target funding level of 100%, deficits/surpluses versus target amortised 20% each year. Funding ‘valuation’ includes discount rate 1.2% pa higher than wind up valuation (equity risk premium – asset strategy 60% equities). See www.nematrian.com/EntityWideRiskManagementForPensionFunds.aspx. Priority on wind up, Benefit value on wind up basis, assuming actual recovery (if sponsor defaults) is 100%, Market implied default rate: Active* (to deferred on wind up), Deferred, Pensioner. * Active members benefit from salary inflation above price inflation, and hence receive higher eventual benefits the longer the scheme does not wind up

Contents | Prev | Next | Library

Desktop view | Switch to Mobile