What Are the Two Components of an Actuary's Calculation of the Required

question 27

Multiple Choice

What are the two components of an actuary's calculation of the required annual contribution to a Pension Trust Fund?

• A)the net pension obligation and the actuarial accrued liability
• B)the regular cost and the normal cost
• C)the amortization of the actuarial value of assets and the actuarial accrued liability
• D)the normal cost and the amortization of the unfunded actuarial accrued liability

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Definitions:

Interest Rates

The cost of borrowing money or the return on savings, typically expressed as an annual percentage.

Monetary Policy

Actions taken by a central bank, currency board, or other regulatory authorities to control the money supply and interest rates to achieve macroeconomic objectives such as controlling inflation, consumption, growth, and liquidity.

Economy Regulation

The imposition of rules by the government intended to modify the economic behavior of individuals, firms, or industries to achieve policy outcomes.

Unfunded Liability

A financial obligation or promised benefit for which sufficient funds have not been set aside, often relating to pensions or other post-employment benefits.