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Discontinuance (Provision of future benefits payments (gradual run-off the…
Discontinuance
Provision of future benefits payments
gradual run-off the liabilities through temporary continuation as a closed scheme
transfer the liabilities to another pension scheme with the same sponsor
transfer the funds to the beneficiary to extinguish the liability
transfer the funds to a personal pension or new employer's scheme to invest and provide a benefit
transfer the liabilities to an insurer to guarantee the benefit
transfer to a central discontinuance fund.
Expectations of the beneficiaries
growth of benefits with price inflation or salary growth
further accrual of benefits
continuation of past practices of discretionary benefits
benefits being at least as valuable as the contributions pad.
Level of assets available
if assets are insufficient to meet members' rights then a lower benefit will be paid
legislation or scheme rules may indicate which types of benefits are to be reduced or which beneficiaries are to have their benefits reduced.
in addition to the scheme's assets on discontinuance, legislation may require a debt to be place on a sponsor, or additional funds might be available through insurance.
Rights of the beneficiaries
may be defined in different ways, for example:
the benefits that have already been received
the continuation of benefits that are currently in payment
left the scheme voluntarily at the moment of the discontinuance
remained in the scheme until retirement (but without any further accrual)
remained in the scheme until retirement and continued to accrue benefits