QUESTION: I want to check the sample life payment form values produced by my Valuation run in a PPA target liability sample life report, which, of course, uses PPA segment rates as the valuation interest basis. I ran the Administration Factors Tool but the annuity factors match only for the sample life report row for the year of the valuation date. How can I check the payment form values for the later decrement years shown in the sample life report?

ANSWER: PPA segment rates (and spot rates) vary by duration from the valuation date, an option that does not apply to the Administration Factors Tool, which calculates annuity present values as of the termination date (i.e., decrement date) implied by your parameter settings under the Current Ages topic. This is analogous, however, to a valuation assumption that interest rates vary by duration from the decrement date, not the valuation date. Therefore, the factor value matches the annuity payment form value only in the sample life report row for which the decrement date is the valuation date (or six months later if the decrement timing, entered under the Decrements topic of Valuation Assumptions, is midyear).

To check payment form values for ages at decrement that are not the age in the valuation year, you must run other sample lives, one for each age whose payment form value you wish to check. For example, suppose your sample life is age 50 on the valuation date. Select (or create) additional sample lives who are ages 51, 52, etc., on the valuation date and run the liability sample life report on them too. For each sample life, the payment form value shown in the row for the valuation year will match the annuity factor value produced by the Administration Factors Tool for the Current Age corresponding to the age in that sample life report row.