Actuarial Outpost
 
Go Back   Actuarial Outpost > Actuarial Discussion Forum > Pension - Social Security
FlashChat Actuarial Discussion Preliminary Exams CAS/SOA Exams Cyberchat Around the World Suggestions



Reply
 
Thread Tools Search this Thread Display Modes
  #1  
Old 03-27-2016, 11:10 PM
Johnnyfootball Johnnyfootball is offline
SOA
 
Join Date: Oct 2014
Posts: 11
Default Bridging benefit provisions

A retirement plan I do work for is seeking to "bridge" cost of living adjustments. If you are not familiar with the term, the active participants would receive no COLA on the accrued benefit earned for future service accruals. The plan is considering adopting this either on a frozen basis or on a final average salary basis such that the COLA accrued to date could still increase with future salary increases.

Unfortunately our valuation system can't efficiently/appropriately value such a provision. My questions to you- Have you encountered a similar situation (perhaps with a different benefit provision like an age/svc retirement condition)? If so, how did you value such a provision and what valuation software did you use?

Thanks in advance
Reply With Quote
  #2  
Old 03-28-2016, 09:48 AM
Dan Moore's Avatar
Dan Moore Dan Moore is online now
Member
SOA AAA
 
Join Date: Jan 2008
College: University of Dallas
Posts: 2,141
Blog Entries: 1
Default

Quote:
Originally Posted by Johnnyfootball View Post
A retirement plan I do work for is seeking to "bridge" cost of living adjustments. If you are not familiar with the term, the active participants would receive no COLA on the accrued benefit earned for future service accruals. The plan is considering adopting this either on a frozen basis or on a final average salary basis such that the COLA accrued to date could still increase with future salary increases.

Unfortunately our valuation system can't efficiently/appropriately value such a provision. My questions to you- Have you encountered a similar situation (perhaps with a different benefit provision like an age/svc retirement condition)? If so, how did you value such a provision and what valuation software did you use?

Thanks in advance
Any software should handle the frozen COLA case in 2 valuation runs. I have worked on a case like this long ago using my employer's (now obsolete) proprietary valuation system. Something like ProVal should work for both the frozen & final average salary cases.
__________________
The best time to plant an oak tree is twenty years ago. The second best time is right now.
Reply With Quote
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off


All times are GMT -4. The time now is 12:21 PM.


Powered by vBulletin®
Copyright ©2000 - 2018, Jelsoft Enterprises Ltd.
*PLEASE NOTE: Posts are not checked for accuracy, and do not
represent the views of the Actuarial Outpost or its sponsors.
Page generated in 0.12046 seconds with 9 queries