Analysis of experience
Reasons for monitoring
Explain the source of surplus or deficit
Recognise the significance of the assumptions
Check or predict the results
Data required
Assets and liabs at DOPV and DOV
Data relating to any factor that may have affected the scheme during the period between these valuations
Analysis process
If CoB, A and L must be based on either the new basis or the old basis as long as the values are consistent.
Normally preferable to use the new basis as
Better check on results of current valuation
Helps in guiding any short term advice
Help in judging suitability of new basis
Performing the analysis on the old assumptions is useful for setting the new basis
Once an item has been analysed, all subsequent calculations are based on the expected values of that item to avoid double counting.
Usual to start with items that are expected to have greatest financial significance
Economic assumptions often have the greatest financial significance
Future service cost
The stability of retirement benefit costs under the chosen funding method may depend on the stability of the age/ gender structure of the membership.
Past service cost
salary increases
contributions paid
inflationary increases
demographic factors
benefit improvements
new entrants
investment return
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