A plan has a non-uniform retirement age of 62. This means the benefits must be tested at a retirement age of 65.
I understand the normalization calculation involves the following:
1 Take the monthly benefit at 62 and multiply by a normal form APR divided by a QJSA to get an immediate QJSA benefit (all this at AE assumptions)
2 Increase this from 62 to 65 using testing assumptions (either a pure interest if AE has no pre-retirement mortality or Dr/Dx if it does)
3 Take the result and multiply by a QJSA divided by a straight life annuity using testing assumptions
Now, what happens when the test is using different pre and post retirement interest rates for testing purposes. I believe Step 2 should use the post-retirement rate for the increase from 62 to 65.
Is this correct??