The effect on pension fund contributions of a change in the entry age

Extract

In a previous paper (J.S.S.9, 105) the present writer investigated the effect upon pension fund contribution rates of a change in the salary scale. A further note (J.S.S.10, 47) discussed the effect of a change in the rate of interest. The present note is concerned with the variation in contribution rates with varying entry age, the actuarial bases remaining constant. The note takes account only of the contribution in respect of the pension benefit and disregards any additional contribution required to provide a benefit payable on death or withdrawal.

As before, we suppose that a single pension age, M, independent of entry age, sufficiently allows for normal, late and early retirements (if any) and that the pension is 100 k% of pensionable salary for each year of service.