FAPInJax Posted October 4, 2005 Posted October 4, 2005 Hopefully this is a very simple question BUT I can not find a cite to back up the calculations. A valuation is being performed as of 1/1/2005. The participant has an accrued benefit at 1/1/2005 of 1,000 and at 12/31/2005 of 1,500. The participant is NOT currently vested (the plan uses 5 year cliff vesting). The valuation uses a termination assumption. Does the current liability calculation use vesting to determine the termination liability?? a) 0% vesting (current vesting percentage) b) Graded (starting at 0% and incrementing at each incidence age until retirement limiting to 100%) c) 100% of accrued benefit Any cite to back up the choice??? Thanks in advance for any help.
david rigby Posted October 4, 2005 Posted October 4, 2005 Does the current liability calculation use vesting to determine the termination liability?? No. You should use the turnover assumption in determining the EOY CL, but vesting is not relevant. 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.
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