Question: A large defined benefit pension scheme has made a significant profit from selling investments in hedge funds that were part of its investment portfolio and

  1. A large defined benefit pension scheme has made a significant profit from selling investments in hedge funds that were part of its investment portfolio and now has a substantial surplus.

(a) Outline the options available for using this surplus. [4 marks]

(b) Discuss the factors that will influence how and when the surplus is used by the scheme. [8 marks]

[Total 12 marks]

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