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  #11  
Old 03-20-2005, 04:28 PM
drctypea drctypea is offline
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traci - thx for the reply

i think i understand what you are saying in relation to 86-48, but let me see if i can further the discussion. The ruling also accounts for optional forms of benefit - does this mean (trying to keep my thinking in line with what you wrote) that we would theoretically need to calculate the AB under each different optional form provided and this would serve as our PC 6 liability? (minus of course benefits accounted for in other PC's)

the ruling also says that the items listed are included in teh PC6 liability even if participant has not yet satisfied the eligibility requirement. Does this mean that in your exmple below if the person was only say 58, but the ER eligibility/subsidies kicked in at 60, that we would assume for PC6 sake that the person obtained age 60.

Also - in your Example 8-9 you say that "Smith is assumed to be single as of the deemed distribution date." You then go on to solve the problem with this assumption. I then go to do Problem 15 from the 2001 exam. Here the problem also states that the participant is single - but then uses missing participant annuity assumptions assuming the J&S benefit (since we need the most valuable benefit). How come you did not do this in your example? Please explain.

Sry for being naive with this stuff.not much experience to help me out and this stuff i find very hard. ..thx
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  #12  
Old 03-20-2005, 06:01 PM
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Okay -- I'm going to start over -- I apologize, I'm not doing a very good job of explaining this.

It's one of those things that when you get it - you just get it - but it's kind of tough to spell out ...

Anyway -- Okay - here we go:

Let's say that my accrued benefit is $1000 per month. The Normal Form of benefit is a life annuity - with optional forms of payment calculated using the actuarial equivalent.

To calculate my present value - there is no need to look at each optional form because the Plan states that all optional forms are AE -- so all we need to do is calculate the PV of the LA.

NOW -- sometimes a plan will say that the normal form is a life annuity but that the conversion to a J&S form of payment is something like .95 -- as opposed to the AE.

In that case -- the J&S benefit is being subsidized -- and so the J&S benefit is more valuable than the LA benefit. So we must include that subsidy (whether the participant is married at the time or not)

In my example 8-9 - no mention was made of any optional form subsidy -- but in 2001 #15, you are given a J&S reduction factor that ends up being a better deal for the participant than the LA -- and so you use it.

The same is true if ER is subsidized -- we must include the subsidies even if the participant has not yet reached eligibility for them.

For example -- Let's say NR = 65 and ER = 60 with a 3% per year reduction.

For a participant with AB = 1000 who is age 55 -- we would calculate the PV by taking the 1000 * .85 and multiply this by N(12)60/over D55 to get the present value.

This gives the participant the benefit of the ER subsidy.

If it's not clear whether ER is subsidized -- for example if the reduction is say 7% per year -- that may or may not be better than the annuity deferred to 65. Then you must calculate it both ways to make sure the participant is getting the most valuable benefit.

How are we doing???
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  #13  
Old 03-20-2005, 10:56 PM
drctypea drctypea is offline
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crystal clear

thanks for takign the time to explain it - appreciate it.

one more quick thing however - say the j&s reduction in problem 15 was 12%. This would give us a LS amount of 126.3*75*(1-.12) = 8335.8. This would be less than the life annuity LS of 116.8*75 = 8760. Are you saying then we would use the life annuity in this case because it is more valuable. This makes sense but the reg specifically says to assume the person is married: "4050.5(b)(2)..."

dont mean to harp on small points but this ties into my logic on thinking bout other questions.thx

Last edited by drctypea; 03-20-2005 at 11:15 PM..
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  #14  
Old 03-21-2005, 02:38 PM
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Quote:
Originally Posted by drctypea
one more quick thing however - say the j&s reduction in problem 15 was 12%. This would give us a LS amount of 126.3*75*(1-.12) = 8335.8. This would be less than the life annuity LS of 116.8*75 = 8760. Are you saying then we would use the life annuity in this case because it is more valuable. This makes sense but the reg specifically says to assume the person is married: "4050.5(b)(2)..."
Yes -- I think you would use the LA in that case - because even if they were married they would have the option to choose the most valuable form of payment.

Again - someone correct me if I'm wrong.
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  #15  
Old 04-04-2005, 12:36 PM
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Default Study Notes by Traci

Traci,

I am trying to download the study notes that you wrote, since everyone is saying how great it is. However, when I clicked on the link that is shown, I get an error message. Could you please let me know how I can download that study notes? Is there another link that I can try?

Thanks for your help in advance!
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  #16  
Old 04-06-2005, 09:50 PM
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Hmmm -- I'm not sure why you're getting an error -- when I click on the link, it brings up the file.

If you would like, I can e-mail the word file to you -- just LMK -- I hope you find them helpful!
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  #17  
Old 04-15-2006, 02:40 AM
student_actuary student_actuary is offline
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Quote:
Originally Posted by OC girl
Traci,

I am trying to download the study notes that you wrote, since everyone is saying how great it is. However, when I clicked on the link that is shown, I get an error message. Could you please let me know how I can download that study notes? Is there another link that I can try?

Thanks for your help in advance!

I get an error too. Can you change the link or put it in some other place

Thanks a lot
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  #18  
Old 04-17-2006, 11:19 AM
cb400f cb400f is offline
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Try this:
http://www.actuarialoutpost.com/examlinks.html#ea
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  #19  
Old 02-03-2009, 12:35 PM
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This has to be outdated at this point...
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How to explain actuarial exams to someone else...

Good Einstein quote - "One had to cram all this stuff into one's mind for the examinations, whether one liked it or not. This coercion had such a deterring effect on me that, after I had passed the final examination, I found the consideration of any scientific problems distasteful to me for an entire year."
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  #20  
Old 01-04-2010, 02:16 PM
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His study tips are available at http://www.studymanuals.com/excerpts...s_11-19-09.pdf.

But since you were looking last year, maybe you don't care!
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