boy val normal cost late retirement

[Draper55]

participant age 65;no more accruals under the benefit formula.

participant decides not to retire but take some in servcie distributions.

late retirement benefit is actuarial equivalence of normal retirment benefit.

for boy val(age 65) i think best approach is to say funding target is

pvab and no service cost. at age 66 boy val(one year later)

determine

actuarially equiv benefit to age 65 adjusted for payments and use this for the funding target. once again

no svc cost. does this seem a reasonabe approach?

[SoCalActuary]

I agree with your approach.

[chc93]

Suppose there were no in-service distributions. Has it been agreed that the actuarial equivalent increase from age 65 to 66 is or is not in the target normal cost?

[SoCalActuary]

chc - the actuarial equivalence is not an increase in benefits. If a participant elected a J&S option, would that be a target normal cost?

No, of course not. Late retirement is just the same issue, because it is the actuarial equivalent of the prior accrued benefit.

[chc93]

Thank you.