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Funding methods (Comparison of methods (AASCR (At any age, the AASCR >…
Funding methods
Comparison of methods
PUSCR
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Stable if the membership profile has a stable age, gender and salary structure
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CUSCR
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Stable if the membership has a stable age, gender and salary structure AND stable past service.
AASCR
At any age, the AASCR > PUSCR and hence generates a surplus.
For EAM, PUM and CUM, payment of the SCR will result in assets equal to the AL (provided experience is as assumed)
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Stable if the membership profile has a stable age, gender and salary structure
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Can only make direct comparisons in all circumstances between the AASCR and the EASCR and between the AASCR and the PUSCR
Where contribution rates are stable, we can make use of the 'high/low' rule to compare the EASCR, PUSCR and CUSCR.
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Under each method there is an 'ideal' amount of fund, called the Actuarial Liability (AL), and the corresponding 'ideal' contribution rate, called the Standard Contribution Rate.