pension modes except U.K.

Joint & Survivor annuity payment forms, available in the pension modes except U.K., are payable to married participants. In the U.S. qualified, U.S. public and universal pension modes, strictly speaking, joint & survivor payment forms are payable only to married participants who elect a J&S option; the remainder of the married population receives whatever form of benefit is payable to unmarried members.

In sample life reports, the payment form value reflected in liabilities blends the value of the joint and single life forms; for active lives, this is based on the marriage assumptions as coded under the Other Valuation Parameters topic of Valuation Assumptions.

Calculated values for active members (and emerging inactive members, in a forecast) are as of the decrement date, which can range from (ProVal’s assumed) hire date to the date the 100% retirement age is attained. Calculated values for inactive members (initial inactive members, in a forecast) are as of the valuation date (the decrement from active status having already occurred).

Values shown are determined under one of the formulae below, depending on whether marital status (that is, the existence of a spouse/beneficiary) is determined at the time of decrement from active status (at the valuation date for inactive members, or for initial inactive members in a forecast), at the time benefit payments commence or at the time of member death. (The parameter to specify which date is used to determine marital status is part of the payment form definition for a joint and survivor type of annuity.)

Note that determining the beneficiary at decrement will produce a different result from determining the beneficiary at commencement only if benefit payment is deferred, instead of commencing immediately upon decrement.

For more information about discounting for interest and survivorship (member, beneficiary and joint), see the Technical Reference article entitled “Present values: benefits payable (m)thly”.

Note:  to derive J&S annuity values at monthly ages under the Administration Factors Tool, ,  and (defined below) at integral ages are interpolated, first to determine values at the fractional member age for both spouse integral ages and then to determine values (for this member fractional age) at the fractional spouse age.  The interpolated values of ,  and are then put together to form the present value of the entire J&S payment form.

Beneficiary determined at decrement or valuation date:

If this option is selected, the payment form value will be equal to:

where ages are:

x  the member’s age on the decrement date or valuation date and

y  the beneficiary’s age on the decrement date or valuation date;

and annuity values at decrement are:

 for the annuity to the member,

 for the annuity to the beneficiary,

 for the joint life annuity

and

 is the percent married, determined at the decrement or valuation date,

 is the percent of the married population electing a J&S option

 

and J&S fractions of benefit received are:

 when both the member and beneficiary are alive,

 when only the member is alive and

 when only the beneficiary is alive.

, and all have the same deferral, certain and temporary periods, the same benefit payment frequency and the same annuity payment timing (beginning versus end of period).

 

Beneficiary determined at commencement:

If this option is selected, the payment form value will be equal to:

where d is the length of the deferral period (period between decrement, or the valuation date, and commencement),

is the probability the member survives from decrement, or the valuation date, to commencement

and the remaining variables are as described above, except as modified by age subscripts.

 

Beneficiary determined at member death:

This option is equivalent to valuing the sum of a life annuity to the participant and a post-decrement death benefit (with beneficiary determined at member death) to the surviving spouse.

If this option is selected for a retirement benefit, and the benefit is immediate and not temporary, the payment form value will be equal to:

where:

 is time between the decrement date (for actives) or valuation date (for inactives) and death, and

 is the payment frequency, e.g. 12 for monthly payments.

 

In all modes other than German pension:

 

In the German pension mode, these variables are instead calculated as follows:

where:

 is the annual interest rate.

If the Individual Method applies, then:

 where:

 is the spouse mortality based on the retiree mortality table

 is the spouse mortality based on the beneficiary mortality table.