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. 30 min read, ~4,449 words.
Accrued benefit = the past-service portion of the plan formula, valued as if the member exited today with current salary and service frozen. Three benefit formulas: final salary, final average salary (FAS), career average revalued (CARE), plus flat-dollar (collectively bargained). Vesting decides whether the accrued benefit survives early exit. Cliff...
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- Content
- Example 1
- Example 2
- Example 3
- Example 4
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Learning objectives
- 5d
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