With-Profits Group Pension Schemes

Synopsis

A small but growing number of life offices are willing to allow participation in profits to group pension schemes. Well-designed schemes, whether with- or without-profits, satisfy quite different requirements from ordinary policies; these requirements are first examined with special reference to their effects on the design of with-profits schemes. Thereafter, certain general actuarial questions are discussed which an office must settle against the background of its own policy and circumstances, once it has decided in principle to transact with-profits schemes. Different possible types of scheme are then considered in the light of these discussions, with special reference to bonus systems and costing plans, and to the prospects of successful competition with without-profits schemes. The paper ends with a short survey of misunderstandings which an office should guard against in dealing with the public.