Plan Definitions - OPEB mode
(See also Plan Definitions - pension modes except German and Plan Definitions - German mode.)
In the OPEB mode, benefits for both active and inactive members are determined by the Plan Definition. The Plan Definition is simply a collection of individual benefits, each of which is payable to either active or inactive members or their spouses. The number of benefits that may be included in a plan is unlimited.
The contingency initiating a benefit for an active member may be any one of the four decrements – retirement, termination, death and disability – or “in-service”, to indicate a benefit payable to a plan member while in active status. ProVal will warn you about each decrement to which the active population is subject that does not initiate a benefit. For example, if you include an active mortality table in the valuation assumptions but do not include a death benefit in your plan, ProVal will point this out at execution.
If you have several benefits initiated by the same contingency, ProVal will decide, based upon a few parameters, which benefits are paid:
The eligibility requirements for these benefits may or may not overlap. If an individual is concurrently eligible for two benefits, then both may be paid. For example, when an active member becomes eligible to retire, he/she then may become eligible for both retiree medical benefits and retiree term life insurance. See Active Eligibility for more information.
Post-decrement probabilities may be associated with one or more of the benefits. Suppose that term life insurance is included in the plan automatically for the participant but by election for the spouse (as would be typical if the member does not have to contribute towards the cost of his/her own insurance but would have to pay part of the cost of the spouse insurance). Then a post-decrement probability would be associated with the spouse life insurance, to indicate the probability that the spouse life insurance is elected. If, for example, 30% of members elect spouse life insurance, then the spouse of a future retiree will have a 30% chance of being covered by this insurance. Although having post-decrement probabilities add to 1 is common, it is not required. Also see Benefit Definitions - OPEB Mode for information about the parameter used to apply these probabilities.
The eligibility requirements for the benefits payable upon retirement have additional significance. They affect the manner in which the decrement tables identified in your valuation assumptions are used. Before the earliest date at which an active member is eligible to retire, the member will be subject to the termination decrement but not to the retirement decrement, even if the retirement rate reference table has non-zero values at the corresponding member ages. After the earliest date at which the member is eligible to retire, the situation reverses: the termination decrement “turns off” and the retirement rates begin to apply.
Plan Name is a text field for the name of the plan (and hence this Plan Definition library entry) for which benefits are defined.
Benefit Definitions lists all of the benefits (Benefit Definitions) that have already been identified as a part of this plan (Plan Definition). The Modified column shows the date of the most recent modification to the library entry. To edit an existing Benefit Definition or to omit it from the Plan Definition, double-click the entry or select the entry and click the Edit button. To create a new Benefit Definition, click the New button. To add or omit several Benefit Definitions at a time, click the Add/Omit button, which leads you to a list of Benefit Definitions unhidden in the current Project. Check off any Benefit Definitions to include in the plan and uncheck any Benefit Definitions you wish to omit from the plan. See Benefit Definitions - OPEB Mode for more information.
Select a topic to edit contains entries for three categories of information found in the Plan Definition:
The parameters of the Plan Attributes dialog box pertain to the U.S. Medicare coverage age, the definition of attribution service under the linear proration to decrement attribution method, rounding of U.S. social security wage bases and covered compensation and the averaging period to be used in a final average salary calculation.