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How to calculate actuarial equivalent


Guest mymellowman
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Guest mymellowman

Hi All,

My father is getting closer to retirement age and I am trying to figure out his retirement benefits.

He works for New Jersey Transit and has either Federal or State based pension (I believe it is Federal.) Anyhow, I have a copy of his retirement benefits which is fairly easy to figure out if it were just him, but it gets more complex as he will be taking a pension that also works with his wife (my mom.)

His base is figured by 2 1/8% of his final average salary (average of the highest three years of the past ten) mutiplied by his years of service. - This part I have figured out.

Where I am having an issue is that it says his pension would be based on the actuarial equivalent which is based on the 1983 group annuity mortality table and a 7% interest rate and other actuarial factors adopted by the committee. What does this mean and how can I figure out (roughly) what this number would be?

Thanks!

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You can't. Not with only that information. You might be able to get close, but since the statement is by definition ambiguous, I wouldn't waste my time.

Your dad should be able to submit a request to human resources for an estimate of what his retirement benefits will be. That estimate should show the specifics of each alternative he has and allow him (with your help) to select the benefit that is best for him and your mom.

Once you get the figures from them, feel free to post followup questions, because sometimes the amounts and benefits shown can be a bit confusing.

Of course, that is not to say that if you have further questions now you can't post them. Of course you can. It is just that it is unlikely (in my opinion) anybody will be able to offer anything concrete without additional information.

You might also want to snag a copy of the Summary Plan Description. That frequently has some very useful information.

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Guest mymellowman

Thanks for the input. It is very greatly appreciated.

I have a copy of the Plan (which is where I got much of the information I posted) but I will have him get in touch with HR to try and figure it out further.

It seems there are two options for having my mom on the plan, but he didn't no that. (He doesn't know of anyone else who knows there are two options) but I found it through digging through the paperwork.

I'll definitely swing back around when I have more details.

Thanks again!

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