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Old 02-28-2020, 11:35 AM
Rashed Rashed is offline
Non-Actuary
 
Join Date: Feb 2020
Posts: 7
Default Help with calculate end of services benefits

Hello all,
I want to check if am I correct with the steps when calculating the end of services benefits according to IAS 19
If I have the following employee data:
age 33
past services 6 years
monthly salary 3000
assumption
Attrition rate 10%
Salary Escalation 3%
Discount Rate 4.80%

end of service benefit rules on Retirement, Termination, Death:

Employees Total Service Period
< 2 years = 1/2 month Scheme Salary

2 - 5 years = 1/2 month Scheme Salary

5 - 10 years ="First 5 years: 1/2 month Scheme Salary, > 5 years: 1 month Scheme Salary

> 10 years =First 5 years: 1/2 month Scheme Salary, > 5 years: 1 month Scheme Salary


Are the following steps are correct
1- to calculate the future expected years of work (remaining years to retire x (1-attrition rate) x (1-death probability))
2- projected final salary ( monthly salary x (1+i)^future expected years of work)
3- Projected Gratuity Amount = projected final salary* (future expected years of work +past working years)
4- benefit accrued = projected final salary* (.5*5)+(1*1)
5- discount the benefit amounts to the date of valuation (not clear enough for me)

If anyone can help me with the steps and I will be grateful if applied to the previous example or any example.
Thanks
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