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07-18-2002, 03:45 PM
Would (1) and (2) below be equal?
(1) total of normal cost and supplemental cost for EAN level dollar with supplemental cost spread as level payments over the working lifetime (from “a” to “r”) life contingently (the same way that PV of future normal costs are determined OR temporary employment-based annuity).
(2) normal cost for ILP level dollar

To me it seems like they would be equal.

FIOB
07-18-2002, 04:17 PM
I think it would be the same, but what you are calling (1) is not EAN. You are saying you would spread the cost by individual over a life contingent annuity. This is just another way to describe the Normal Cost for ILP. For EAN you would spread the supplemental cost over certain number of years depending on what created the cost and what type of plan it is. Anyhow, I think the answer to your question is yes.