Actuarial Outpost 2008 Lump Sum distribution calcs
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#11
12-27-2007, 03:16 PM
 Steve Grondin Member SOA AAA Join Date: Nov 2001 Posts: 6,453

Quote:
 Originally Posted by Doug G. I am very sorry for creating confusion on this post. The adjustment factors to an annual stream of payments I mentioned in an earlier post is correct. However, I mistakenly included a 10-year certain period in creating the rates I posted. Without the certain period, I match those posted by Former Actuarial. Please accept my apology.
Glad to hear there is a reason behind the differences when we looked like we were saying the same thing.
#12
12-28-2007, 10:21 AM
 wheat66 Member SOA Join Date: Sep 2001 Posts: 293

somewhat related:
http://www.asppa.org/nl/december/07-32.pdf
#13
12-28-2007, 10:56 AM
 tymesup Member Join Date: Mar 2005 Posts: 854

I loved this part - The Technical Update states that the “guidance represents
PBGC’s current thinking on this topic,” and “does not create
or confer any rights for or on any person or operate to bind
the public.”
#14
01-24-2008, 03:36 PM
 Rick_G Member Join Date: May 2005 Location: Just south of the Big Chicken Posts: 2,193

Quote:
 Originally Posted by Absolutsju I am looking to verify the immediate factors that I have calculated for Lump sum distributions in 2008 (reflecting PPA changes). Using Oct 2007 rates (4.77% Treas, 4.85% Spot1, 5.02% Spot2 and 5.09%SPot3) - I calculated the following values to convert an immediate monthly annuity to a lump sum: 50 = 190.1389 55 = 176.8137 60 = 161.1369 65 = 143.5088 Can anyone verify or dispute this for me?
I've just updated my Excel examples to include the 2008 mortality tables. I am not reproducing your values.

Which mortality table did you use?
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Rick Groszkiewicz

Now offering online seminars and everything else under the sun for actuarial exams.
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#15
01-25-2008, 01:55 PM
 Former Actuarial Member Join Date: Oct 2007 Posts: 2,891 Blog Entries: 5

Quote:
 Originally Posted by Rick_G I've just updated my Excel examples to include the 2008 mortality tables. I am not reproducing your values. Which mortality table did you use?
i matched using the oct rates (phased in rates are 4.85%, 5.02% and 5.09%), and the new mortality table.

APPENDIX
2008 Applicable Mortality Table
Age lx qx
1 1,000,000.00 0.000380
2 999,620.00 0.000252
3 999,368.10 0.000200
4 999,168.23 0.000153
5 999,015.36 0.000139
6 998,876.50 0.000132
7 998,744.65 0.000126
8 998,618.81 0.000114
9 998,504.97 0.000110
10 998,395.13 0.000111
11 998,284.31 0.000114
12 998,170.51 0.000118
13 998,052.73 0.000124
14 997,928.97 0.000135
15 997,794.25 0.000145
16 997,649.57 0.000154
17 997,495.93 0.000164
18 997,332.34 0.000170
19 997,162.79 0.000174
20 996,989.28 0.000177
21 996,812.81 0.000182
22 996,631.39 0.000189
23 996,443.03 0.000200
24 996,243.74 0.000210
25 996,034.53 0.000224
26 995,811.42 0.000246
27 995,566.45 0.000255
28 995,312.58 0.000264
29 995,049.82 0.000278
30 994,773.20 0.000303
31 994,471.78 0.000350
32 994,123.71 0.000396
33 993,730.04 0.000441
34 993,291.81 0.000486
35 992,809.07 0.000529
36 992,283.87 0.000569
37 991,719.26 0.000608
38 991,116.29 0.000636
39 990,485.94 0.000664
40 989,828.26 0.000698
41 989,137.36 0.000738
42 988,407.38 0.000784
43 987,632.47 0.000836
44 986,806.81 0.000897
45 985,921.64 0.000954
46 984,981.07 0.001010
47 983,986.24 0.001072
48 982,931.41 0.001150
49 981,801.04 0.001237
50 980,586.55 0.001347
51 979,265.70 0.001449
52 977,846.74 0.001597
53 976,285.12 0.001793
54 974,534.64 0.002020
55 972,566.08 0.002378
56 970,253.32 0.002853
57 967,485.19 0.003279
58 964,312.81 0.003746
59 960,700.49 0.004251
60 956,616.55 0.004856
61 951,971.22 0.005634
62 946,607.81 0.006471
63 940,482.31 0.007518
64 933,411.76 0.008493
65 925,484.29 0.009602
66 916,597.79 0.010968
67 906,544.55 0.012222
68 895,464.76 0.013448
69 883,422.55 0.014889
70 870,269.27 0.016329
71 856,058.64 0.017998
72 840,651.30 0.020050
73 823,796.24 0.022220
74 805,491.49 0.024781
75 785,530.61 0.027627
76 763,828.76 0.030695
77 740,383.04 0.034561
78 714,794.66 0.038635
79 687,178.57 0.043206
80 657,488.33 0.048326
81 625,714.55 0.054304
82 591,735.75 0.061007
83 555,635.73 0.067895
84 517,910.84 0.076183
85 478,454.84 0.085221
86 437,680.44 0.095318
87 395,961.62 0.107508
88 353,392.58 0.120363
89 310,857.19 0.134135
90 269,160.36 0.149293
91 228,976.60 0.163173
92 191,613.80 0.178866
93 157,340.61 0.194378
94 126,757.06 0.208519
95 100,325.80 0.224167
96 77,836.07 0.237405
97 59,357.40 0.251508
98 44,428.54 0.265606
99 32,628.05 0.276614
100 23,602.67 0.286677
101 16,836.33 0.301731
102 11,756.29 0.313092
103 8,075.49 0.324542
104 5,454.65 0.335529
105 3,624.46 0.345501
106 2,372.21 0.353906
107 1,532.67 0.361363
108 978.82 0.368721
109 617.91 0.375772
110 385.72 0.382309
111 238.26 0.388123
112 145.79 0.393008
113 88.49 0.396754
114 53.38 0.399154
115 32.07 0.400000
116 19.24 0.400000
117 11.54 0.400000
118 6.92 0.400000
119 4.15 0.400000
120 2.49 1.000000
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Last edited by Former Actuarial; 01-25-2008 at 02:02 PM..
#16
01-25-2008, 02:26 PM
 Rick_G Member Join Date: May 2005 Location: Just south of the Big Chicken Posts: 2,193

That is the same table I'm using.
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Rick Groszkiewicz

Now offering online seminars and everything else under the sun for actuarial exams.
EA-2F and EA-2L and EA-1
#17
01-25-2008, 04:44 PM
 Steve Grondin Member SOA AAA Join Date: Nov 2001 Posts: 6,453

Quote:
 Originally Posted by Rick_G That is the same table I'm using.
Do you have available as intermediate values the 5yr temp life annuity at 4.85, the 5 yr deferred 15 year temporary life annuity at 5.02, and the 20 year deferred life annuity at 5.09%?

Cross checking those could reveal why you don't match.
#18
01-25-2008, 10:46 PM
 satellite_actuary Join Date: May 2006 Posts: 22

For an employee who will terminate 2/28/08 and start receiving benefits March 1 2008, I will use the following to calculate the 417(e) transitional rates:

1) December 2007 GATT rate (since the plan year 1/1- 12/31 is the stability period and a one month lookback)

2) Monthly spot segment rates for the month of February(?)
For calculation of blended rates we always have to mandatorily use the segment rates for the month preceding the date of distribution right?

Also if the participant is 63 years 4 months- do I use exact age calculations i.e. From Age 63 yrs 4 months - Age 65 : Nothing

From Age 65 yrs - Age 68 4 months : First Segment rate
From Age 68 yrs 4 months - Age 83 4 months : Second Segment rate
From Age 83 yrs 4 months onwards : Third Segment rate

Thanks all
#19
01-26-2008, 03:21 PM
 Duffer Member ASPPA COPA Join Date: Feb 2007 Location: Teeing off Studying for Blues guitar Posts: 1,493

Quote:
 Originally Posted by satellite_actuary For an employee who will terminate 2/28/08 and start receiving benefits March 1 2008, I will use the following to calculate the 417(e) transitional rates: 1) December 2007 GATT rate (since the plan year 1/1- 12/31 is the stability period and a one month lookback) 2) Monthly spot segment rates for the month of February(?) For calculation of blended rates we always have to mandatorily use the segment rates for the month preceding the date of distribution right? Also if the participant is 63 years 4 months- do I use exact age calculations i.e. From Age 63 yrs 4 months - Age 65 : Nothing From Age 65 yrs - Age 68 4 months : First Segment rate From Age 68 yrs 4 months - Age 83 4 months : Second Segment rate From Age 83 yrs 4 months onwards : Third Segment rate Thanks all
I think you are confusing different sections of PPA.
The 417(e) values for a lump sum are governed by your stability period & lookback, not the rates just preceding the date of distribution. Further, for 2008-11, you will use the phase-in rates weighted against the 30 yr treasury rate posted for the same month of lookback.

PBGC premiums are based on the monthly rates just preceding the beginning of the premium coverage period.

Funding is a whole other issue, requiring elections by the plan sponsor.

IRS has illustrated rates based on completed months of age. From their example, your segment rate periods appear to be correct.
#20
01-29-2008, 03:38 PM
 Rick_G Member Join Date: May 2005 Location: Just south of the Big Chicken Posts: 2,193

Quote:
 Originally Posted by Steve Grondin Do you have available as intermediate values the 5yr temp life annuity at 4.85, the 5 yr deferred 15 year temporary life annuity at 5.02, and the 20 year deferred life annuity at 5.09%? Cross checking those could reveal why you don't match.
Thanks. I'll try that once I get finished with the EA-2B seminar mailings.
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Rick Groszkiewicz

Now offering online seminars and everything else under the sun for actuarial exams.
EA-2F and EA-2L and EA-1