Public Sector Valuatio towards strengthening P towards strengthening P
2
ndWorkshop on E
Group 5 –
‐ Y. P. Sabharwal
‐ M. L. Sodhi Nikhil Gupta
‐ Nikhil Gupta
‐ Anuradha Sehgal
‐ Punit Jagtani
ns: How can we move Pension Benefit Liability?
Pension Benefit Liability?
Employee Benefits
Points of consideration Points of consideration
D t l t d i
Data related issues
Rules pertaining to different catego Purpose of valuation
Components of liability
Basis and assumptions for valuatio Relevance of funding arrangement
ories of employees
on
t to valuation
Data related issues
Data related issues
C l t
Completeness Consistency
Treatment of Missing data
Rules pertaining to diffe p g employees
R l li bl l it
Rules applicable on employees wit
erent categories of g
th f t th i j i i d t th reference to their joining dates
Purpose of Valuation Purpose of Valuation
P i i i A t
Provision in Accounts Contribution to Fund Transfer of Liability Exploratory
Components of liability Components of liability
E i ti E l
Existing Employees
• Family pension contingent upon dea
• Employees pensionEmployees pension
• Family pension contingent upon dea
Separated Employees
• Employee pension
F il i ti t d
• Family pension contingent upon dea
Current beneficiary other than em Current beneficiary other than em
th during service
th of employee after vesting of pension
th f l
th of employee
ployee ployee
Basis and assumptions f Basis and assumptions f
S l i Salary rise
• During Service for employees
• Basic
• DA
• Pensioners and Beneficiaries
• DA
• DA
• Impact of Periodic revision of wages
Attrition Rate
Imputed Rate of Interest/ Discount Service Table (Multiple Decrement Service Table (Multiple Decrement
for valuation for valuation
t Rate t Table) t Table)
Relevance of funding ar g Valuation
Di t R t f V l ti f Li b Discount Rate for Valuation of Liab
rangement to g
bilit / R t I t t
bility v/s Return on Investments
Key points to deliberate Key‐points to deliberate
S l i Salary rise Attrition rate
Funding arrangement