Hopefully this is a very simple question BUT I can not find a cite to back up the calculations.

A valuation is being performed as of 1/1/2005.

The participant has an accrued benefit at 1/1/2005 of 1,000 and at 12/31/2005 of 1,500. The participant is NOT currently vested (the plan uses 5 year cliff vesting).

The valuation uses a termination assumption. Does the current liability calculation use vesting to determine the termination liability??

a) 0% vesting (current vesting percentage)

b) Graded (starting at 0% and incrementing at each incidence age until retirement limiting to 100%)

c) 100% of accrued benefit

Any cite to back up the choice???

Thanks in advance for any help.

No. You should use the turnover assumption in determining the EOY CL, but vesting is not relevant.