Schedule SB Average Retirement Age

[Andy the Actuary]

The SB instructions provide, "On an attachment to Schedule SB, list the rate of retirement at each age and describe the methodology used to compute the weighted average retirement age, including a description of the weight applied at each potential retirement age, . . . "

A plan provides for unreduced early retirement at age 62 and 20 years of service. The retirement assumption is that participants retire at normal retirement age (65) or otherwise when first eligible for an early retirement age. This statement describes the methodology. However, the weights are dynamic and not an assumption but rather a function of the participant demographics.

Are those with analogous provisions providing the "weights" (i.e., w% at 62, x% at 63, y% at 64, and z% at 65) and if so, are the percents weighted by benefits or liabilities.

[SoCalActuary]

If you averaged the assumed retirement ages of the population in your plan, you would arrive at something between 62 and 65. So that goes onto the form.

The attachment would state that you used "the average of the assumed retirement ages".

The request does not match your perfectly valid approach, so ignore the instructions.

[Mike Preston]

It is an interesting question as to what a "rate of retirement" means at the ages between 62 and 65 in the situation you describe. In my opinion, what you are describing is that the retirement "rate" is always 100% at the earliest age eligible to retire under either the normal or early retirement provisions, which is what I would put on an attachment. I would then show an average age, either weighted by liability or not, as you choose (and further describe on said attachment).