Actuarial assumptions are critical estimates used to calculate the likely costs of pension schemes and life assurance policies, essential for determining contributions and benefits.
Actuarial gains and losses occur due to discrepancies between previous actuarial assumptions and actual experiences, or adjustments in those assumptions. These variances impact the present value of defined benefit pension schemes and are typically recognized in other comprehensive income.
An Additional Voluntary Contribution (AVC) allows employees to make extra contributions to their pension schemes over and above the standard contributions from their employer or themselves. This helps in enhancing their pension benefits upon retirement.
