The Decrements topic of Projection Assumptions asks the same questions as the Decrements topic of Valuation Assumptions, but with respect to actual decrements over the period of the forecast, instead of the decrements assumed for valuation of liabilities at each valuation date in the forecast. Thus the decrements specified in Projection Assumptions represent the actual experience of the plan from the initial (or baseline) valuation date to any forecast valuation date. Anticipated future experience as of any valuation date in the forecast is represented by the decrements specified in Valuation Assumptions.

For example, your valuation assumption for the retirement decrement might be that all participants retire at age 65. This simplified assumption may be adequate for valuation purposes but might not be adequate for a forecast, in which one is more concerned about the plan’s cash flow. Therefore, for the forecast period, you might assume that actual retirements occur at all ages from 55 to 70. In this case, actuarial gains or losses will occur because the plan’s experience (retirement at various ages) differs from the valuation assumptions (all retirements at a single age).

For details about coding the parameters of the Decrements topic of Projection Assumptions, refer to the Decrements topic of Valuation Assumptions.

Note: a dynamic mortality table may not be selected for actual mortality rates experienced over the projection period, because the dynamic tables (although available in all ProVal pension modes of operation) are provided to meet statutory and regulatory requirements, in the U.S. qualified mode, for valuation assumptions under PPA law. Dynamic mortality rates entail a change in the valuation mortality assumption at each forecast valuation date and thus actual mortality experience would not, generally, bear a direct relationship to the expected mortality rates used in the valuation performed at the forecast date. Instead, if the Valuation Assumptions reference a dynamic mortality table and you wish to approximate the same mortality improvement in a forecast, specify a generational mortality table with the same annual improvement rates as the dynamic table. See also the discussion of mortality improvement and dynamic mortality in the article entitled “Decrement Tables”.