For a DB plan, calculate and interpret the actuarial accrued liability and the normal cost for benefits payable on age retirement or early exit using the projected unit credit (PUC) and traditional unit credit (TUC) valuation methods.
Free SOA Exam ALTAM (Advanced Long-Term Actuarial Mathematics) lesson in Pension Plans and Retirement Benefits. 41 min read, ~6,198 words.
TUC values the accrued benefit at CURRENT salary; PUC projects to the decrement-age salary. The two coincide when the salary scale is flat (career-average). AAL is the PV of benefits attributed to PAST service (uses ); NC is the PV attributed to ONE additional service year. For final-pay plans with...
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What this lesson covers
- Content
- Example 1
- Example 2
- Example 3: Multi-Age Retirement with 3-Year FAS and 50% J&S
- Example 4: Death-in-Service plus Withdrawal Multi-Decrement NC
- Example 5: Recursion NC, Roll-Forward Gain, Divorce-Equivalence
- Common Mistakes
- Check Your Understanding
- Exam Shortcuts
Learning objectives
- 5e
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