Expected benefit payments
Expected benefit payments (EB) calculated in a Valuation or Core Projection represent the expected cash payments during the year. These values are used in a Valuation Set or Deterministic Forecast without adjustment and are assumed payable in the middle of the year.
Actives
For each active benefit, k, the expected benefit payments, , are a function of the probability of decrement, , thethat is payable upon decrement, inactive mortality for the year beginning on the valuation date, the number of payments per year, m (in OPEB mode, m = 1) and the payment form. Consider the following examples.
Life annuity
Annuity certain
Life insurance
Lump sum
Modified cash refund
Under a middle of year decrement assumption, expected benefit payments use average benefits, a half-year’s benefit payments and a half-year’s mortality (except for in the timing adjustment). That is, in the equations above, ProVal uses in place of and:
in the pension modes: in place of ,
in OPEB mode: in place of,
for lump sums (in pension and OPEB modes): in place of .
Inactives
Inactive expected benefit payments, , are a function of the in force, inactive mortality for the year beginning on the valuation date, the number of payments per year, m (in OPEB mode, m = 1) and the payment form. Consider the following examples.
Life annuity
Annuity certain
Life insurance
Lump sum
Modified cash refund