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  #11  
Old 09-27-2005, 07:27 PM
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Malik Shabazz Malik Shabazz is offline
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Quote:
Originally Posted by Traci
I guess I continue to use it because it doesn't confuse me.

I've worked on 100's of plans and J&S has always meant reduced upon the death of the participant. If it means reduced upon the death of either, It's been called a "TRUE J&S".

One of those things that you just grow up with - so it doesn't seem strange.
I agree. At this point, the terminology is so deeply established -- among professionals and participants -- that changing it to conform with the rest of the profession would be more confusing than just leaving it alone.
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  #12  
Old 09-28-2005, 04:28 PM
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Originally Posted by Malik Shabazz
I agree. At this point, the terminology is so deeply established -- among professionals and participants -- that changing it to conform with the rest of the profession would be more confusing than just leaving it alone.
So... changing the meaning of an established term (J&S) to something that is already well defined otherwise (CA) and then modifying the changed term to make it refer to the original meaning ("true J&S") is better than keeping the statutory modified original ("qualified J&S") just because one lazy branch of the profession doesn't want to "confuse" a particular audience (that doesn't understand it anyway) and doesn't seem to mind being out of step with compatriots?

No wonder Harpo asked for help!
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  #13  
Old 09-28-2005, 05:12 PM
Emily Emily is offline
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Originally Posted by Fuzzy
So... changing the meaning of an established term (J&S) to something that is already well defined otherwise (CA) and then modifying the changed term to make it refer to the original meaning ("true J&S") is better than keeping the statutory modified original ("qualified J&S") just because one lazy branch of the profession doesn't want to "confuse" a particular audience (that doesn't understand it anyway) and doesn't seem to mind being out of step with compatriots?

No wonder Harpo asked for help!
The terms are defined in the plan document for every plan we work on. We use terminology that is consistent with the plan rather than some dusty old actuarial textbook. It so happens that almost all plans define a J&S to be reduced upon the death of the participant.
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  #14  
Old 09-29-2005, 12:08 AM
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Quote:
Originally Posted by Fuzzy
So... changing the meaning of an established term (J&S) to something that is already well defined otherwise (CA) and then modifying the changed term to make it refer to the original meaning ("true J&S") is better than keeping the statutory modified original ("qualified J&S") just because one lazy branch of the profession doesn't want to "confuse" a particular audience (that doesn't understand it anyway) and doesn't seem to mind being out of step with compatriots?

No wonder Harpo asked for help!
Unless I'm confused, the audience is buying the tickets (i.e. paying the bills). All prosperous entertainers give the audience what it wants.

Seriously, who cares about terminology? Are you a taxonomist? A linguist friend of mine once said, "The language, as it is spoken, is correct". She would say that pension actuaries have their own language (i.e. terminology), which is correct.
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Last edited by The Matrix; 09-29-2005 at 01:43 AM..
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  #15  
Old 09-29-2005, 09:05 AM
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Originally Posted by The Matrix
Seriously, who cares about terminology? Are you a taxonomist? A linguist friend of mine once said, "The language, as it is spoken, is correct". She would say that pension actuaries have their own language (i.e. terminology), which is correct.
We all care about terminology, otherwise, we wouldn't be having this discussion! If we don't understand the terminology being used, we're not communicating. One pension actuary talking to another pension actuary might understand the simple term "J&S" to mean the same thing, depending on the context of the conversation. A pension actuary talking to a participant must ensure that the participant understands the term and is, in fact, mandated to provide the definition in terms designed to be understood by the average participant. No matter the audience, it is absolutely necessary that everyone uses the same definition of a term in order to be understood, that's why plan documents include definitions in the first place. And you should know by now that not all plans define terms the same way (just look at all of the definitions of "Year of Service", or "Accrued Benefit", or even our "J&S": some include the percentage in the basic definition and then might add modifiers for other percentages, some even actually do define the "real" J&S as an option!). If you are within that particular plan context, by all means, use the term that that audience understands and uses. But once you change audiences, you must ensure that the definition is restated if there is any potential for confusion.

What happens if the participant takes his (qualified) 50% J&S out into the marketplace and asks the first individual annuity insurance agent he runs into for the price to replace it? Is he well served if the agent actually does price a "true" 50% J&S simply because he understands the term differently in his normal life?

And that's part of the problem with the original post and first response here, the context of Alfies_Girl's question included the pop-up to be on the beneficiary's death, indicating that a contingency was involved and we logically assumed that the death of the participant meant that 50% of the reduced benefit continued to the beneficiary (even though at least one plan I know of provides that the survivor benefit is a percentage of the original, unreduced, pension!). But Harpo's response clearly mixed up the joint life vs last survivor expression definitions that we all (supposedly) use.

This thread has changed into a discussion about terminology where no else has responded to the original question, or my invitation about the formula. I have no idea of Harpo's level of experience or education or whether his formula was a quick unedited response or an example of incompetence or simply miscommunication. Maybe that's the problem: does anyone really have a formula? (MaliK: have you reviewed my formula yet? Traci: what formula is used in your table?)

If they do, let's have it. If the don't, check mine, or Harpo's, or create your own. But let's respond to Alfies_Girl's "is there a nice formula...?" in clear terms.
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Last edited by Fuzzy; 09-29-2005 at 09:09 AM.. Reason: missed a reference
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  #16  
Old 09-29-2005, 11:18 AM
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Originally Posted by Fuzzy
If we don't understand the terminology being used, we're not communicating. ... you must ensure that the definition is restated if there is any potential for confusion.
<sarcasm on> thanks for the recap from Pensions 101 <sarcasm off>

Quote:
Originally Posted by Fuzzy
What happens if the participant takes his (qualified) 50% J&S out into the marketplace and asks the first individual annuity insurance agent he runs into for the price to replace it? Is he well served if the agent actually does price a "true" 50% J&S simply because he understands the term differently in his normal life?
Any agent with enough experience to price an annuity will know the common usage of the term "J&S" -- and should double-check the document to be sure. No problem.

Harpo was just trying to be helpful -- that he may have been confused about the terminology doesn't mean that the rest of us are. If he was, I'd guess he's relatively new to the field.

I've never had a case where the term "J&S" was a problem - not for me - not for other actuaries - not for plan administrators - and not for participants. It's not a problem - why make it one?

Quote:
Originally Posted by Fuzzy
This thread has changed into a discussion about terminology where no else has responded to the original question,... let's respond to Alfies_Girl's "is there a nice formula...?" in clear terms.
I did answer the original question -- the answer is "no - not really - unless you want to create it from scratch to check your table."

Harpo was on the right track - I didn't look at yours.

But I have a program that I use for optional forms (it's not a table, it's a program - I've checked it enough times over the last 10 years to be comfortable that it's accurate) and I offered to send Alfie a table for comparison.

Last edited by Traci; 09-29-2005 at 11:22 AM..
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  #17  
Old 09-29-2005, 03:23 PM
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Quote:
Originally Posted by Traci
<sarcasm on> thanks for the recap from Pensions 101 <sarcasm off>

Any agent with enough experience to price an annuity will know the common usage of the term "J&S" -- and should double-check the document to be sure. No problem.
Traci, I think that your sarcasm is misplaced...you yourself say that the document should be checked to be sure...doesn't that mean that you admit that there is room for confusion?

Quote:
Originally Posted by Traci
Harpo was just trying to be helpful -- that he may have been confused about the terminology doesn't mean that the rest of us are. If he was, I'd guess he's relatively new to the field.
I didn't say that Harpo was confused on the terminology, I said that I thought that he had the definitions mixed up. And NO ONE has specifically responded to that statement! Malik came the closest when his first response included "I'm not able to review your formulas right now"...but I'm hoping that he's going to get a chance soon 'cause I think that this thread is getting out of hand.

Quote:
Originally Posted by Traci
I did answer the original question -- the answer is "no - not really - unless you want to create it from scratch to check your table."

Harpo was on the right track - I didn't look at yours.

But I have a program that I use for optional forms (it's not a table, it's a program - I've checked it enough times over the last 10 years to be comfortable that it's accurate) and I offered to send Alfie a table for comparison.
I beg to differ, you did NOT answer the original question, you simply offered to use your program to provide a set of factors. If you wish to respond to the question, please provide your formula...I assume that you have one since you say that you have "checked it enough times". If you think that Harpo was on the right track, explain why. And if you didn't look at mine, how can you intelligently comment either way? And if you don't have a formula, how did you "check" your program? I hope that you would not offer to perpetuate a "my program matches yours, so it must be accurate" fallacy without reviewing the first principles underlying the program!

So, let's not go any further on this "confusing terminology" rant...we seem to be in agreement that definitions count and some of us seem to be willing to go our own way with terms that other specialists use differently...I'll agree to disagree (especially when I get to court and have to testify, or try to interpret a settlement agreement so the plan administrator can adminster a QDRO). So, let's see if anyone can get back on point: is there a nice formula? and What is it?
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"We created an environment where we didn't know what we were doing, but it was legal and making profits."(Bill Sharon, chief executive of Sorms)
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  #18  
Old 09-29-2005, 04:11 PM
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Quote:
Originally Posted by Fuzzy
If we don't understand the terminology being used, we're not communicating.
Fuzzy, this statement is quite right. I think you need to go back and reread Harpo's post. Assuming the following statement of your's is correct (based on the terminology you used in your post).

Quote:
Originally Posted by Fuzzy
Harpo would have been correct if he'd left off the "bar"
Then Harpo was correct using his/her terminology defined in his/her post.

Quote:
Originally Posted by Harpo
Assume:
ax = life annuity to member
ay = life annuity to beneficiary
axy = life annuity while either is alive (a 100% JS factor)
axybar = life annuity while both are alive (= ax + ay - axy)
The important thing is to make sure all particpants understand the terms used. If I like to call my benefit forms Fred and George, it doesn't matter, as long as everyone I use those terms with understand what I am talking about.
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  #19  
Old 09-29-2005, 04:15 PM
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Quote:
Originally Posted by Fuzzy
Traci, I think that your sarcasm is misplaced...you yourself say that the document should be checked to be sure...doesn't that mean that you admit that there is room for confusion?
No -- I'm not confused either way -- but there's always room for someone to word their document differently - so it's always a good idea to check.

Quote:
Originally Posted by Fuzzy
I beg to differ, you did NOT answer the original question, you simply offered to use your program to provide a set of factors. If you wish to respond to the question, please provide your formula...
I'm sorry -- I didn't realize there was only one correct way to repond to a request. <sarcasm off>

I'm simply not interested in sitting down and mapping it out for anyone from scratch -- if you want to - be my guest.

But I was offering to help -- by providing an additional reference that I'm confortable with. I'm sorry if that doesn't meet with your standards of helpfulness.


Quote:
Originally Posted by Fuzzy
I'll agree to disagree (especially when I get to court and have to testify, or try to interpret a settlement agreement so the plan administrator can adminster a QDRO).
You looking forward to that? Can I get your number?

(Geez I'm feeling old today)
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  #20  
Old 09-30-2005, 11:03 AM
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Originally Posted by Kenny
Then Harpo was correct using his/her terminology defined in his/her post.
Kenny, you are correct, you and everyone in this "discussion" deserve my abject apology: if you consistently apply Harpo's expressions as he defined them, then his first formula is correct! (I guess that you could say that that is what I meant by saying that it would be OK if you left off the "bar".)

I hold with the contention, however, that his definitions switch the conventional expressions defined in Jordan and Bowers...therein lies the basis for my initial confusion and exemplifies the need for careful analysis of the entire presentation. I apologize to Harpo for misdirecting some of my analysis: his initial formula is correct, given his definitions, but his expressions are still inconsistent with "conventional" usage.

I would note, however, that the confusion was abetted by his use of the words "joint life annuity" to describe his "axy" expression at the end of his post. If the conventional "joint life" is the Jordan/Bowers "both survive" usage, then it is inconsistent with his initial definition "while either is alive". If he is changing the conventional definition of the "joint life" terminology (without the "bar") to what Jordan/Bowers describe as the "last survivor" (with the "bar"), then any student who has to pass an SOA exam (or any actuary who had to pass one in the past) should be very careful in any conversation and formulation.

Also, if one applies his initial formula for the general "r" for a pop-up survivor benefit with the 100% pop-up, his expression is inverted! Has anyone yet gotten around to checking the algebra in either posting? Would someone please do so! That was the real intent of my entry into this discussion.

Quote:
Originally Posted by Traci
I'm sorry -- I didn't realize there was only one correct way to repond to a request.
Traci, there is not "only one correct way to respond", but both Harpo & I took the "is there a nice formula" question to mean "what is the formula?" Alfies_Girl obviously has a table already that she was looking for a formula to check. If you think that a "correct" response is to provide another table without ensuring her the ability to check that the underlying formula was proper and correctly used, that is your prerogative. In my opinion, that is an inadequate, and potentially misleading, response.
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