Post-decrement probabilities reflect the likelihood of an active participant receiving a particular benefit after satisfying the eligibility requirements and leaving service because of the decrement. A post-decrement probability is a probability of receipt at decrement; as such, the probability is applied only at the date of decrement, not at future dates (i.e., the probability is not on-going after decrement). Mortality is the only contingency applied on an on-going basis after decrement has occurred.

In OPEB plans, post-decrement probabilities are frequently used when retirees may opt out of coverage. Pension plans make use of post-decrement probabilities much less frequently. The most typical pension applications involve:

• Splitting a single decrement up into different types, such as service-related and ordinary disability,

• Reflecting different participant elections, as for lump sum and annuity payment forms,

• A benefit initiated by additional post-decrement events, such as death after termination but before retirement (e.g., the U.S. qualified plan pre-retirement spouse’s annuity payable because of the death of a terminated vested participant who had not yet retired).

See also Benefit Definitions - pension modes or Benefit Definitions - OPEB mode, which discuss use of post-decrement probabilities, and the Post-Decrement Probabilities topic of Valuation Assumptions.

The Benefit Definition dialog box contains a check box parameter that asks whether post-decrement probabilities apply. Checking this box will prompt a question in Valuation Assumptions, where the applicable probabilities are to be specified.

The probabilities may be constant (i.e., all members have the same probability of receipt of this benefit) or may vary by age, service, age and service (i.e., the table is select and ultimate), and sex. Varying post-decrement probabilities are entered in a table with an interface that permits variation by age, service and/or sex. (Note: if post-decrement probabilities are constant, then it is not necessary to create post-decrement probability tables.)

ProVal looks up table values based on the participant’s age and service as defined by the date of birth (or attained age) and date of hire (or hire age) parameters, respectively, of your Census Specifications. The former parameter applies to both active and inactive participants. The latter parameter applies only to active participants. Furthermore, an active participant’s service is computed as the difference between attained age and hire age. Age and service for table lookups are always computed as whole (not fractional) numbers. For details, see Active Data , Inactive Data - pension modes and Inactive Data - OPEB mode.

If you are coding a Core Projection, Projection Assumptions may also refer to post-decrement probabilities.