Rate Banding in Relius

[dmb]

I have a small X-tested PS plan. Two HCEs, 11 NHCEs. The Ebars for the two HCEs are approximately 8.0 and 5.0. Ebars for the NHCEs range from approximately 11.8 down to 2.4. The plan fails the F & C test for the highest HCE. If I use rate banding without specifying the bands, the plan passes. Basically, Relius reduces both HCEs' Ebars to the low rate of each band, but I'm having trouble figuring out how Relius determines the bands. I would appreciate any help/advice in determining bands and figuring out Relius.

I've also seen some of the prior messages regarding rate banding in small plans and was wondering if feelings are still mostly against it in small plans.

Thanks.

[Tom Poje]

let midpoint = X

and Hi point = Y

then X + X(.05) = Y

or

1.05(X) = Y

so Relius simply sets the HCE at Y and figures backwards

(Or at least that is what I understand)

now, as for whether you can use rate banding, it does not matter if it is a small plan or not.

Rate banding is allowed, but the Relius default method does not seem to be in sync with the regs that says you can rate band as long as it does not significantly favor the HCEs. setting the HCEs at the Hi Point would seem to be in conflict with this.

if the HCE is at 8.0 and you have an NHCE at 8.2 and another at 7.6, that is probably a legitimate grouping with a midpoint of 8 since you are bringing an NHCE up and bringing an NHCE down. Relius default would be

Hi point 8.0

then midpoint = 7.62 (8/1.05)

which means lo point = 7.24 (5% this side of 7.62)

depending on how close your EBARs are it might help to use 7.5 Post Interest, 1983 IAF as mortality. or possibly age definition nearest (or last) depending on whether the HCE was born in the first half of the year.

[dmb]

Thanks Tom, but it actually looks like each HCE is set at the low end of the range.

[Tom Poje]

on the report printout for whatever reason it will show all people within a range at the lowest point, rather than at the midpoint. rather confusing, not a great way of showing this.

dang, cross testing is confusing enough without having a report adding to the confusion.

[Guest merlin]

Relius adjusts the HCE EBAR by .905 (=.95/1.05) to create the low end of the range.