Not applicable for Long Term Disability assumptions in OPEB mode.  

Total salary growth is represented by two components that are geometrically combined: an inflation rate and a merit scale. That is, the total salary increase = [1 + salary inflation rate] * [1 + salary merit scale]. An inflation rate is entered as a constant rate (perhaps varying by calendar year); a merit scale is entered as a table (or as a collection of tables that vary by calendar year or according to the contents of a coded database field). If the salary increase assumption does not distinguish between salary inflation and a salary merit scale, then it may be coded entirely as either an inflation rate or as a merit scale. In particular, if the salary increase assumed is the same rate for males and females and at all ages and years of service (varying, if at all, only by calendar year), then you may enter this constant rate as a salary inflation rate. Similarly, if the salary increase assumed varies by age, service or sex, then you must code the salary increase assumption as a table (that you select as a salary merit scale). Because a Valuation applies both components of salary growth in the same manner, valuation results will be the same regardless of how salary growth is categorized. If a Core Projection will use this valuation as a baseline, however, you may wish to consider splitting the salary increase assumption into the two components, because a projection handles the inflation and merit components of salary growth differently. See Projection Assumptions for more information.

Salary inflation is the portion of salary growth correlated with prevailing economic inflation; it is entered either as a Constant Rate or as rates that vary by coded field/calendar year. Enter the salary inflation rate as a number between 0 and 1 (not as a percentage). If salaries in all future years are assumed to be the same as the current salary, or if a salary inflation rate does not apply (e.g., as for a plan with a benefit formula not related to salary), then enter zero for this parameter. For coding a salary increase assumption that is not separated into inflation and merit components, see the discussion of total salary growth in the preceding paragraph of this article. Selecting salary inflation rates that are Variable by coded field/calendar year will unghost the Parameters button. Clicking the Parameters button leads you to additional parameters to specify how the salary inflation rates vary, such as by calendar year or according to the contents of a coded database field. 

• If rates vary by the contents of a coded field on the database, that is, different rates should be used for different groups of records, identified by values of a coded database field (e.g., Division), check the Coded database field box and then select the field from the list of all coded fields unhidden in the current Project. A Database Code column will appear in the grid below: for each code value, there is a row in the grid for the applicable  Rate. For each database code, enter the desired rate.

• If rates vary by calendar year, check the Calendar years box and enter (in the text box below), for all rates that you will specify, the first calendar year to be associated with each particular  Rate. Two columns, From and To, will appear in the grid below, and rows appear according to the “breakdown by year” indicated by the text box entries. For each year, enter the desired value.

• If rates vary by both a coded field on the database and calendar year, combine the instructions in the two bullets above; the grid below will populate with both the Database Code column and the From/To columns. Specify the desired Rate for each combination of code value and calendar year. 

Indicate the Salary merit scale by selecting from the list of Salary Merit Scale Tables that have been saved and unhidden in the current Project or click the button to create a new table. The table may be sex distinct and may have age and service dimensions. An option is listed for specifying tables that are selected according to a coded database field if different tables should be used for different groups of records, identified by values of a coded database field (e.g., Division), and/or based upon calendar year (referring to the calendar year that a salary is associated with). An additional Salary merit scale may also be specified by clicking the  button. If specified, the total increase in salary from year to year is determined by multiplying the prior year salary by (1+salary inflation) x (1+merit1)  x  (1+merit2).

The Parameters button becomes accessible if the salary merit scale varies by coded field/calendar year. Click this button to access additional parameters for these options. See Varying Salary Merit Scale for details.

If you wish to override this treatment for some Salary Definition included in your Census Specifications or your Plan Definition, click the Salary Increase Overrides button, to enter the Salary Assumption Overrides dialog box, which lists the Salary Definitions unhidden in the current Project. Click the name of a Salary Definition for which you would like to use different salary increase rates and indicate, in the next (Salary Increase Override) dialog box, the salary inflation rate(s) and salary merit scale that should be used instead of the salary increase rates of the “main” (Salary Increases) dialog box. You may specify a Salary inflation override and/or a Salary merit scale override for any of the Salary Definitions listed. The available parameter options are the same as in the "main" dialog box for the Salary Increases topic; see the previous discussion in this article of coding these parameters. After you enter "override" salary scale values, click OK and ProVal returns to the Salary Assumption Overrides dialog box, where an asterisk appears to the left of the name of any Salary Definition for which an override assumption has been specified. If you wish to remove (delete) an existing override of the "main" salary increase rate(s) for a particular Salary Definition, click the Erase button; after removing the override values, ProVal will return to the Salary Assumption Overrides dialog box.