pension actuarial calculation

[Gary]

In trying to verify some factors:

I want to get a response to the value of a52 and a53 with payment of 1 each year at beginning of year.

Based on GAR94 and 4%.

Some of my data includes that

q16 = .000296

l16 = 1,000,000

q117 = 0.50

l117 = 1

l118 = 0

q120 = 1.00

I compute a52 as N52/D52 where N52 = D52 + D53 + D54 + ... D120 and D52 = l52 * v^52.

First please confirm the above data then please let me know your result for a52 and a53.

Thanks.

Gary

[david rigby]

Based on your q16, it appears you are using the GAR94 table, projected to 2002, unisex version. Rev. Ruling 2001-62.

a52(12) = 206.300043

a53(12) = 202.771486

(Divide by 12 if needed.)

Calculations from a spreadsheet that uses l, v, D, N, etc. Standard "upper 12" approximation.

BTW, that table was issued under IRC 417(e). It has since been superseded for 417 purposes.

[Gary]

I'll check into the upper (12) calc, but it would be ideal if I can get a52 and a53 as an annual payment of 1 per year at beginning of year as opposed to a monthly payment of 1 per month at beginning of each month and dividing by 12.

So I am curious to get

1 + vpx + v^2 2px + ... or put another way (Dx + Dx+1 + ...)/Dx.

Thanks much.

I know there are equivalency adjustments but I would like the above.

[rcline46]

Gary, if this is for a qualified plan, you must use the monthly factor times 12 for annual. I don't remember where it is, but the IRS was rather firm about it when discussing distributions.

[david rigby]

The "upper 12" amounts in my previous post use N(12)/Dx.

These amounts use Nx/Dx (assuming annual immediate payments):

a52 = 17.650004

a53 = 17.355957

(Obviously, the 12 factor is not relevant.)

[Gary]

Thanks David

That is exactly what I was looking for.

Gary

[david rigby]

Gary, can we infer that you agree with my calculated values and my definition of the mortality table?

(It's always nice to have someone check your number-crunching.)