Using the term "Liability" - Below, confirmation that the term "Liability" was used in the phrase "Accrued Liability" to describe the transfer value of assets.
A transfer of the Liability is a transfer of the obligation to pay a pension; the "promise" of a pension. To fund the liability, Assets are required. In bookkeeping terms, the Liability would be the Debit and the Assets would be the Credit.
Assumption of Investment Returns - Different investment yield assumptions are used for cash, stocks, property, bonds, etc. If a cash only "investment assumption" was used for all the required assets, a higher capital value would be required. This is because long-term investment returns on "interest on cash" would be lower than investment returns on stocks, shares, bonds and property.
Market Value of Assets - The Market Value of the Assets set aside to fund the Liability could be higher, lower or equal to the Liability, depending of the state of the market. During the 1990's, share prices were high causing the overall market value of Assets to range between 10% and 40% higher than Actuarial Value of Assets and its matching Accrued Liability.
The Actuarial value of assets is the realistic value placed on the assets by the actuary. The actuarial value of the assets must match the actuarial value of the accrued liability.
On page three of the Chief Actuary's letter, the Chief Actuary translates a transfer rule for a specific Fund. The rule refers to "value". It reads: "an amount equal to the present value as determined by the actuary of the benefits which have accumulated in terms of the rules on behalf of the member for completed service".
The Chief Actuary continues: "In other words, this is the accrued liability as defined in section 1 above".
Regulation 15 - However, Regulation 15 clearly specifies the method of establishing the "fair value assets" required to fund the "accrued benefits".
If Regulation 15 did not exist, possible interpretations could be placed on the rule. But, Regulation 15 specifies exactly how the value of assets must be determined and reported on in the Valuation Report.
Though the overall Actuarial Valuation is a globular figure and based on many "assumptions", it is made up of each individual member's specific information including salary, age, service with the fund, sex and in some funds, race (life expectancy varies according to sex and race).
Neutral value - The market value of assets required to fund a liability is established on the day of transfer of funds to the new Pension or Provident Fund. The transfer of one member to another Fund should leave a neutral situation in the original Fund, i.e. there should be no shortfall or surplus in the remaining funding of the original Fund. With the transfer of a member, the "Liability" is transferred together with the market value of assets set aside to fund that liability.