[discount_rates_problem] [summary]

The sums are carried out in Excel, the basic operations being generating cashflows, namely initial single premium, investment returns and contractual payments.

Contracts  They are EITHER pure endowments (10,000 after 15 years) OR annuities (1,000 per annum for 15 years at end of year), with all payments certain.

Inflation Protection  Payments can be either fixed or fully inflation-proofed (RPI).

Pricing Approach  This can be either market-related (“MtM”) or off-market (“Off”).

Assets Portfolios  There are now 3 different investment options (ILGs excluded).

Random Experiences  There are now four (instead of originally six to end-2019).

Random Scenarios  The model is run 1,000 times using random numbers which differ over time for each variable.

Expected Returns  Separately for each experience, for the “Off” case, the approach is one multiple for equities and another for conventional bonds. This year, I have extended the multiples to be 80% or 100% or 120% of what I have been using.

Surpluses And Deficits  No correction payments are made during the 15 years.

Single Premium  This is determined by the initial pricing approach.

Results  The means, standard deviations, highest 5% and lowest 5% are shown.

Publication  The results are mostly shown as interactive HTML5 charts.