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What is the lump sum in advance funding approach?

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asked Nov 9, 2017 in BUS 4027W - Actuarial Risk Management by Rowan (4,010 points)

Could you please explain the lump sum In advance funded approach?

1 Answer

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answered Nov 9, 2017 by jolegutko (870 points)

LS in advance is paid when the benefit is first promised - e.g. when the member joins the pension fund. So if a person joins a pension fund at age 30 and retires at age 65, the LS in advance funding would have been paid into the fund at age 30.