The Interest Rate Tables topic allows you to specify how interest rates will be projected for Estimated Benefit Calculations. The dialog box presents a list of all Interest Rate Tables that exist in the current Project (or were previously affirmatively defined either in these Projection Assumptions or in another set of Projection Assumptions from which this one was copied and "saved as new").  Each Interest Rate table in the list is pre-pended with an indication of the current projection assumption for each table. Typically, the projection assumption identifier will be “Applic”, indicating that the last known applicable rate (or rates) for the table is used for each date after the most recent date in the table.

Use of the last known applicable rate or rates is the default projection assumption unless an affirmative alternative selection is made. The potential projection assumption identifiers displayed to the left of each table name are:

Applic	Use the last known applicable plan rate (or rates).  This is defined as the most recent rate after all of the Interest Rate Table parameters are applied, including the lookback period and the stability period.
Applic+	Use the last known applicable plan rate (or rates) incremented by the value in a specified database field.
Avail	Use the last know available rate (or rates).  This is defined as the most recent historical interest rate adjusted for each of the Interest Rate Table parameters EXCEPT the lookback and stability period. Instead, a monthly stability period and a 0 month lookback period are used to create the most recent applicable rate.
Avail+	Use the last know available rate (or rates) incremented by the value in a specified database field.
explicit value (e.g., 0.025)	Use specified rate.
field name	Use the value from the specified field.
VAR	Use specified rates which vary by future year and month except when the underlying Interest Rate Table is a spot curve (such as segment rates), in which case a projection spot curve is specified.

Click the name of an Interest Rate Table in the list to access the Projection Interest Rates dialog box for that table and complete its parameters to specify the projection assumption for that table. There are two general choices for the projection of an interest rate table: known rates or assumed rates.

If you choose Known rates, there are two choices for the type of known rate:  last applicable rate and last available rate. When Last applicable rate is chosen, the interest rate will remain level in the future at the current (i.e., most recent rate dictated by plan rules) rate. If Last available rate is chosen, the most recent rate available will be used after the applicable period has been completed.  For example, if a plan has an annual stability period with a two month lookback, and the calculation is being processed at the end of the plan year, using the last available rate for calculating benefits beyond the current plan year may provide a more accurate estimate. When using known rates, the Increment by value in field option is available. If this feature is desired, such as to facilitate participant modeling, check the box and choose the scalar numeric database field from the list that will be used to increase or decrease the last known rate by a fixed amount (e.g., 0.01).

If you choose Assumed rate, there are three general choices for the type of assumed rate: constant, constant from database field and variable (or variable by month/year or spot curve depending on the interest rate type), with some variability in options depending on the type of the interest rate table.

To assume a Constant rate, check the box and enter the rate as a decimal (e.g., 0.05). Alternatively to specifying a static constant rate, you may choose Constant from database field and then select a scalar numeric database field to be used for specifying the interest assumption. The specified constant rate will be used for all calculation dates after the most recent applicable period is completed. If the underlying table is a spot curve, a duration-based table or segment rates, the specified constant projection rate will be used at all durations. If the underlying table is a PBGC table, the constant rate is used for the PBGC Immediate Rate and the K1, K2 and K3 assumed rates are specified separately (see below).  

There are different Variable interest rate projection assumptions depending on the type of the underlying interest rate table:

•  If the underlying interest rate table is a static table with a single rate depending on the year and month of the calculation, you may choose to specify the assumed rate as Variable by month/year. Selecting this radio button unghosts a spreadsheet where you can enter any number of interest rate projection rates in the Rate column, specifying in the From column the month and year that the interest rate assumption is first effective.

• If the underlying interest rate table is a spot curve or segment rates (i.e., the text “_spot” is included in the referenced historical interest rate table), you may specify a projection assumption Spot curve. Selecting this radio button unghosts a spreadsheet where you can enter any number of durations in the From column, with the associated spot rate beginning at that duration in the Rate column.

• If the underlying interest rate table is a duration-based table (i.e., the text “_dur” is included in the referenced historical interest rate table), a Variable option is available. Selecting this radio button unghosts a spreadsheet where you can enter any number of durations in the From column, with the associated forward rate beginning at that duration in the Rate column.

• If the underlying interest rate table is a PBGC table (i.e., the text “PBGC” is included in the referenced historical interest rate table), a Variable option for the Immediate Rate is available. Selecting this radio button unghosts a spreadsheet where you can enter any number of PBGC immediate rate projection rates in the Rate column, specifying in the From column the month and year that the immediate rate assumption is first effective.

 

For PBGC tables, you must also specify interest rate projection assumptions for the Prior 7 years (K1), the Prior 8 years (K2) and All prior years (K3). Each of these rates is specified as a constant rate by entering a decimal value (e.g., 0.04) into the associated box.

The View Dependencies… button displays the Actuarial Equivalence library entries, Benefit Formula Components, Accrual Basis Components, Benefit Definitions and Plan Definitions that directly or indirectly (e.g., through payment forms) reference this interest rate table. When you click on the button, a dialog box lists all of the Direct and Indirect Dependencies in the current Project, where the name of each library entry is preceded by an acronym identifying the library type:

AE	-	Actuarial Equivalence library entry
BFC	-	Benefit Formula Component
AB	-	Accrual Basis Component
BD	-	Benefit Definition
PD	-	Plan Definition

The Project multi-choice field near the bottom of the dialog allows you to view the dependencies from a different project or from the <ProAdmin> universe or from the <Orphanage> (which includes references that are not in any project). The Library multi-choice field allows you to view the dependencies from all libraries, or only the ones from a selected library. If you click the Tree View button, a printable summary of the direct and indirect references, identifying the link from one library type to another, will come up in a viewer from which you can print the information or save it to file.