Projection of mortality rates; confusing definition of actuarial equivalence

[Guest Doug Goelz]

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!

[david rigby]

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.

[Guest Doug Goelz]

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!