Doug Goelz
Sep 16 2003, 12:12 PM
Here is the definition of actuarial equivalence in a plan's document:
1983 Group Annuity Table with Projection H, with mortality rates based on calendar year of birth of 1930 and interest at the rate of 7% per annum
I thought I knew how to apply a projection scale to the underlying mortality rates, but this description confuses me. Is the reference to 1930 somehow limiting the ages of the rates to project -- and how is the number of years to use in the projection determined? An example would be great.
Thanks!
pax
Sep 16 2003, 01:06 PM
I don't understand that either. Scale H is given in Volume XXXV (1983) of the Transactions of the Society of Actuaries, pages 881-883. It is related to age, related to a particular year of birth.
Just as important, Scale H is sex-distinct, but your definition appears to ignore that.
Perhaps the given definition is suggesting that you project (to NRD?), starting with the NRD of someone who was born in 1930.
Doug Goelz
Sep 29 2003, 06:11 AM
Just in case anyone else runs into this, I ended up matching these factors based on applying the projection scale for a person born in that year. That is, the age 53 q would have no projection (a person born in 1930 would be age 53 in 1983), while the age 60 q would have 7 years worth of projections (a person born in 1930 would be age 60 in 1990, and 1990 less 1983 is the basis for the 7 years).
This method was applied to the male and female rates and then a 50/50 unisex blend was taken to get the final rates. Nice of them to disclose this!
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