Effective Interest Rate -- Lump Sum

[Andy the Actuary]

Say a plan provides for voluntary lump sum payment upon termination of employment and lump sums are calculated using the GAR94 and 4% [assume 415 does not apply]. So, in determining the FT, we calculate the lump sum and then discount using the appropriate single segment interest rate.

When we calculate the effective interest rate "i," it appears appropriate to calculate the lump sum as before using the plan rate and discount at "i." Under current segment scenarios, "i' might be 6%. Does anyone see this calculation any other way? For example, does anyone believe it is appropriate to recalculate the lump sum at "i" so that perhaps "i" then is closer to 4.75%?

[Blinky the 3-eyed Fish]

I agree with your methodology.

[Andy the Actuary]

I agree with your methodology.

Mr. triclopsian denizen of the deep, I thank you for your comment and offer that out of respect for your avitar and signature, I will no longer use road maps to giftwrap fish.

[tymesup]

Would not a third eye for a truly deep-water fish be a waste of resources? For that matter, would it be able to blink or would it need a permanent cover to protect the relatively fragile eyes?

[Andy the Actuary]

Would not a third eye for a truly deep-water fish be a waste of resources? For that matter, would it be able to blink or would it need a permanent cover to protect the relatively fragile eyes?

The third eye -- to my understanding -- is not a matter of supposition. It's already exists.

[tymesup]

Can we look forward to schools of hyperoptical brinesters? Can we cross them with the Barry clan to get superior peripheral vision and better point guards? Would they still taste like chicken?