The projected salary as at normal retirement age is calculated based on the salary increase assumption, the salary increase month and the number of months to normal retirement age.
The market value of the Member’s total contributions as at the date the Benefit Statements are run is projected to the Member’s normal retirement age based on the investment return assumptions net of the inflation rate if applicable.
The value of future contributions as at the Member’s normal retirement age is calculated based on the contribution rates applicable as at the date the Benefit Statements are run, the salary increase percentage, the number of months to the Member’s normal retirement age and the investment return assumptions net of the inflation rate if applicable.
The projected value of the current contributions and the projected value of future contributions are summed.
The annual pension that can be purchased with the projected capital value is calculated based on the annuity rate for the Member’s Normal Retirement Age and current age. These factors are maintained in the Benefit Rules for the Scheme and linked to the Benefit Product used in the Benefit Package for the calculation of the normal retirement benefit (see Annuity Factors above).
The calculation of the replacement ratio is available when using the Flexible Benefit Statements (refer to Replacement Ratio Document Tags above) and the value is the calculated as follows:
Projected annual pension / percentage of projected annual salary * 100