For a DB plan, calculate and interpret accrued benefits, including benefits on early exit from the plan.
Free SOA Exam ALTAM (Advanced Long-Term Actuarial Mathematics) lesson in Pension Plans and Retirement Benefits. 31 min read, ~4,575 words.
Accrued benefit = the past-service portion of the plan formula, valued as if the member exited today with salary and service frozen. Four benefit formulas: final salary, final average salary (FAS), career average revalued (CARE), and flat-dollar (collectively bargained). Vesting decides whether the accrued benefit survives early exit. Cliff (e.g...
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What this lesson covers
- Content
- Example 1
- Example 2
- Example 3
- Example 4
- Common Mistakes
- Check Your Understanding
- Exam Shortcuts
Learning objectives
- 5d
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