QUESTION: In my plan, final average salary is the average for the five calendar years of employment preceding the date of determination. (Salary for the first year of employment is adjusted, by the ratio of days in the calendar year of hire to days of employment in that year, to a full year’s salary.) How do I get ProVal to include salary in the year of hire when computing final average salary?

ANSWER: The first age for which ProVal will include salary in an averaging period (i.e., the first age appearing in sample life output) is the rounded age according to the selection of field for the Date of Hire (or Hire Age) parameter in Input | Census Specifications | Active Data. Consequently, depending upon the relationship among valuation date and dates of birth and hire, Proval will include salary for the year of hire in the salary averaging period for some participants but not for others.

For example, consider a 1/1/1999 valuation and two plan participants, Robert and John, both hired in 1995. Their data is as follows, where the 1999 pay rate is in the current salary field and the starred salaries are in the salary history fields of the salary definition:

	Robert	John
Birth Date	1/7/1969	4/22/1954
Hire Date	8/28/1995	8/17/1995
1999 Pay Rate	58,000	150,000
1998 Salary*	56,600	147,739
1997 Salary*	51,868	143,677
1996 Salary*	47,088	142,385
1995 Salary	15,201	22,154
Adjusted 1995 Salary*	44,035	59,023

If the dates of birth and hire of the census specifications are the dates shown above, and if the Final Average Salary Calculation parameter is coded "averaging period excludes current salary" in Input | Plan Definitions | Plan Attributes, then ProVal will compute the following:

	Robert	John
As of 1/1/1999:
Attained Age	29.98	44.69
Rounded Attained Age	30	45
Hire Age	26.64	41.32
Rounded Hire Age	27	41
Final Average Salary	51,852	113,989

The sample life display of the accrual basis component 5 #FAS 5 for Robert will be:

Year	Age	Salary	Final AverageSalary
1996	27	47,088	47,088
1997	28	51,868	47,088
1998	29	56,600	49,478
1999	30	58,000	51,852

and for John will be:

Year	Age	Salary	Final AverageSalary
1995	41	59,023	59,023
1996	42	142,385	59,023
1997	43	143,677	100,704
1998	44	147,739	115,028
1999	45	150,000	123,206

John’s salary in 1995 is included in his final average salary, but Robert’s is not.

To always include the salary for the year of hire in the salary averaging period, compute rounded age on the valuation date in the year of hire and specify this age as the hire age field in your active data census specifications. Be mindful, however, that this definition of hire age will be used whenever Proval uses hire age (or date of hire) as defined in the census specifications (e.g., to calculate the value of the accounting output variable “average service”, to determine the year of the first row, i.e., assumed hire year, of the entry age normal sample life report). In our example, the valuation date in the year of hire is 1/1/1995 for Robert and John, and ages are:

	Robert	John
As of 1/1/1995:
Age	25.98	40.69
Rounded Age	26	41
Rounded Hire Age	26	41

Now ProVal will include 1995, when Robert is 26, in the salary averaging period.

NOTE: To always exclude salary in the year of hire, instead compute rounded age on the valuation date in the year after the year of hire, and specify this age as the hire age field of your census specifications.