Guest HaroldA Posted June 17, 2005 Posted June 17, 2005 Can anyone tell me how you calculate the accrued liability and normal cost under this method?
david rigby Posted June 17, 2005 Posted June 17, 2005 The best answer is: don't do it! However, one could refer to page 196 of Authur W. Anderson's excellent book "Pension Mathematics for Actuaries" (second edition). There may also be references in SOA exam study notes. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
Ron Snyder Posted June 21, 2005 Posted June 21, 2005 The usual formula for AL = PVB-PVFNC. However, the formula for PVFNC under the Modified Aggregate method is PVFNC = PVB - AVA (actuarial value of assets). Therefore, the accrued liability is not calculated using the modified aggregate method. For full funding purposes, the accrued liability is calculated using the entry age normal method. The normal cost is the PVFNC spread over remaining years of service.
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