The Assets & Expenses dialog box contains parameters that provide information necessary to analyze the gain or loss due to cash flow over the period (plan contributions and investment income less benefit payments and expenses paid from plan funds) that is other than expected.

Entering asset information will not only provide you with the asset gain/loss (an easy hand calculation) but will also provide a reconciliation of the unfunded accrued liability for immediate gain recognition cost methods or a reconciliation of the present value of future normal cost for spread gain recognition cost methods. This reconciliation is a useful tool for checking the reasonableness of the total gain or loss.

Entering actual benefit payment information, or actual expenses paid from plan funds, will allow ProVal to compare actual to expected benefit payments, or actual to expected expenses, and thus analyze this source of gain or loss. Entering actual benefit payments and/or expenses is useful even if you don’t enter assets, because benefits payments and assumed expenses affect the liability side of the equation.

To compute the asset gain / (loss), in addition to the liability gain / (loss), check the box Show asset gain = A1 –[A0 (1+i)^n + iC – iB – iE] and complete the parameters (that then become accessible) for total plan amounts of: Assets A0: Beginning of period; Assets A1: End of period; Expenses iE: Actual, with interest to end of period and Contributions (employer + employee) iC: Actual, with interest to end of period. You may also change the value of the parameter Benefits payments iB: Actual, with interest to end of period. (See the discussion of benefit payments in a following paragraph.)

If you choose to compute the asset gain / (loss), you may also compute the expense gain / (loss), by checking the box Show expense gain = EE (1+i)^n – iE. The expected expense parameter (Expenses EE: Expected, beginning of period) will then become accessible. Complete both this parameter and the actual expense parameter (Expenses iE: actual, with interest to end of period).

Regardless of whether you wish to see analysis of the asset and/or expense gain / (loss), you should select the desired option for specifying actual Benefit payments iB: Actual, with interest to end of period. If you provide, in a database field for each end-of-period database record, the sum of the benefit payments the participant received during the period, choose the End of period database field option and select the field that will contain the end-of-period value of benefit payments, accumulated with interest to the end of the period. Keep in mind that all records appearing on the end-of-period database with a participating status (i.e., active, retired, terminated vested, disabled, or survivor) at either the beginning of the period or the end of the period will contribute to the sum. Missing values will be treated as zeroes. To provide instead the total value of benefits paid during the period for all plan participants, select the Total option and enter, in the text box, the total amount of plan benefit payments, accumulated with interest to the end of the period. If actual benefit payments with interest are not available, either in total or by individual database record, then the parameter must be set to the Use expected, given end of period status option, in which case ProVal will set actual benefit payments received during the period, by each end-of-period database record, equal to its calculation of expected benefit payments — which does not necessarily produce the same value as the expected benefit payments value from the beginning-of-period Valuation(s). ProVal’s amount of actual benefits paid reflects the expected benefit payments determined in the beginning-of-period Valuation(s), but using the end-of-period status of each record (not the beginning-of-period status). For example, if a member with an active beginning-of-period status has a retired status at the end of the period, the actual benefit payments received during the period are determined based upon the retirement benefit calculated in the beginning-of-period Valuation(s). ProVal will further adjust expected benefit payments to equal the total liability settled for any participants who have non-participating or missing end-of-period statuses and are assumed cashed out (see Non-Participating Statuses for more information).