Past service reserve meaning

Past service reserve describes the actuarial present value, at a given valuation date, of a member’s accrued defined benefit for service already completed. For salary‑related schemes, it is commonly calculated allowing for projected increases in pensionable salary up to retirement (for example under the projected unit method), but it excludes the cost of future service. The term is not defined in UK or Irish pensions legislation; it is an actuarial and pensions practice expression used in scheme rules, valuation reports and funding discussions. In England & Wales, Scotland and Northern Ireland, the statutory funding regime refers instead to “technical provisions”, being the prudent value of accrued liabilities set by trustees with the scheme actuary—broadly aligned with, but not identical to, the scheme’s aggregate past service reserve. In Ireland, funding law refers to the statutory funding standard and funding standard reserve; “past service reserve” may still be used descriptively in actuarial reporting. Key features include dependence on actuarial assumptions (discount rate, mortality, inflation and salary growth) and methodology. Typical uses are scheme funding valuations, assessing deficits, bulk transfers, and employer accounting under IAS 19/FRS 102. Summing individual member reserves gives the scheme’s total past service reserve.