pension modes except German

(See also Minimum Liability under German Benefit Promises.) 

In modes other than U.S. Qualified and Universal, this topic is called "Minimum Liability"

In U.S. Qualified and Universal mode, if valuing a Variable Annuity Plan, check This is a Variable Annuity Plan with a hurdle rate of and enter the hurdle rate. In valuations and core projections, the hurdle rate will be used to value all liabilities, in lieu of the interest rates entered in valuation assumptions. In Valuation Sets and Forecasts, the valuation assumption interest rates will be used. In addition, if lump sum factors or optional payment forms reference the underlying liability interest rate, that will be the interest rate entered in valuation assumptions.

The Minimum Liability allows you to specify an account balance that serves as the minimum possible recognized liability for an active member. If a liability measure for a record is less then the minimum liability, then an additional minimum liability will be generated to make up the difference, so that the total liability will equal the account balance. This is typically used when an individual account balance is maintained as an asset of the plan, and the actuary wants to avoid reporting a surplus for anyone whose actuarially generated liability is less than the asset.

You can select that the account balance is Employee contributions accumulated with interest. In this case, the minimum liability for a record will be the sum of all refundable employee contribution accounts (see Contribution Definitions). In all modes, you can select that the minimum liability be modeled in a Benefit Formula Component. Select the component, typically a Cash Balance component, that represents the account.

 

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