Calculate replacement ratios for Defined Contribution (DC) and Defined Benefit (DB) plans, including final average salary (FAS), career average earnings (CAE), and career average revalued earnings (CARE) plans.
Free SOA Exam ALTAM (Advanced Long-Term Actuarial Mathematics) lesson in Pension Plans and Retirement Benefits. 36 min read, ~5,362 words.
Replacement ratio, where is first-year retirement income and is the salary just before retirement. DC ratio: accumulate contributions at fund rate, divide by annuity factor, divide by final salary. Market-driven, not guaranteed. FAS DB:, where is the accrual rate, is years of service, FAS averages the last salaries. CAE:. No...
Read the full lesson, free →
Worked examples, audio narration, and practice. No signup to read.
What this lesson covers
- Content
- Example 1
- Example 2
- Example 3
- Example 4
- Common Mistakes
- Key Takeaways
- Exam Shortcuts
Learning objectives
- 5a
Browse all free Exam ALTAM lessons or jump into free Exam ALTAM practice questions.