Select Committee on House of Commons Members' Fund Report


5.  FUNDING OBJECTIVE AND ASSESSMENT METHOD

  5.1  The funding objective is that there should be sufficient assets at the reporting date to meet the future liabilities in respect of awards made up to that date, including future awards to the surviving spouses and civil partners of former Members currently receiving payments.

  5.2  The assessment method is to compare the capitalised value of future liabilities with the value of the assets at the reporting date. In order to compare the value of the liabilities, comprising of future outgo on grants awarded to beneficiaries, with the value of assets, it is necessary to discount the expected future liability payments with interest. Assumptions as to future interest rates, mortality rates and rates of annual increase to grants must be made, as described in section 6 below.

  5.3  This report assumes the Fund will continue in its current form.


 
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Prepared 29 October 2007