Benefits Overview And Provider Of Benefits Flashcards
Why not set withdrawal reserves
Pressures on reserves
Increase the risk of selective withdrawals
Increase withdrawals, reduces profitability
Premiums would need to increase, reducing the competitivity
Why might a company lose market shares
Uncompetitive premiums
More effective marketing by other companies
Competitors may offer loyalty programs
Paid lower commission than others
May be focusing on other products
Bad reputation
Stricter underwriting
May not have sufficient capital to expand new business
What can we do to grab market shares
Reduce premiums
Expense savings
Reduce the profit required per policy
Consider selling policies at a loss
Offer attractive risk premiums
Reduce the level of underwriting
Introduce loyalty programs
Increase commission rates
Increase advertising budget
Improve after sales service
How could we reduce the outgo of our business (pension)
Increase retirement benefit age
Reduce the level of increases in benefits
Reduce the starting level of benefits
Toughening eligibility requirements
excluding certain population
introduce means-testing
why would the contribution rate for a DB scheme increase
increasing longevity
poor investment returns
default of some investments
salary growth higher than expected
higher expense inflation than expected
more stringent regulation
reduction of tax incentives
option costs greater than expected
pension increases greater than expected
benefit improvements required by regulation
increasing maturity of membership
merits of means-testing for pensions
reduce cost of benefit provision
how many people affected depend upon the streingency of means-testing
such a change may be viewed as fair but some members would be aggrieved if they paid contributions
people who have been setting aside private pensions would be penalised
discourage people from making their own provision
means-testing invovles complicated administration and increases costs
lead to inconsistent treatment across generations
state the interests and needs of the sponsor/members/trustees in a DB fund
'’sponsor’’
provide benefits that meet the needs of the members and their dependants
manage the cost of providing benefits
control the pace of funding of scheme
meet legislative requirements
members
provision of benefits on events such as death/retirement/withdrawal
flexible benefits
flexible contributions
security of benefits
trustees
manage the assets of the scheme
ensure efficient administration of scheme
ensure security of benefits for members
maintain solvency in the scheme
ensure fair treatment of members
list ways in which state regulation could impact retirement provision by employer/sponsors of DC funds (besides investments)
min or max contribution rates
tax deduction allowances
limit commissions associated with insured benefits
require certain benefits to be insured
require minimum benefits to be offered
required qualifications or education of trustees
allowing for contracting out of state schemes
maximum on admin/investment charges and fees
min/max retirement age
prescribe the form of purchase at retirement
prescribe method and assumptions for benefit projections
require a minimum fund size or pooling of funds
