QUESTION: My benefit formula is an (A) + (B) format where (A) is a frozen (past service) accrued benefit as of 1/1/1989 and (B) represents (future) service-based accruals since 1/1/1989. Can I prorate the frozen accrued based on service prior to 1989?

ANSWER: Yes. Use an Accrual Definition type of Benefit Formula Component that is Basis Only for part (A). The basis might look something like this:

AccBen89 * {[(#SERVICE Svc) #DIV FrozSvc89] #MIN 1}

where AccBen89, Svc, and FrozSvc89 are Accrual Basis Components linked to database fields holding:

AccBen89 1/1/1989 accrued benefit if hired before 1/1/1989, else 0.

FrozSvc89 credited service as of 1/1/1989 if hired before 1/1/1989, else 0.

Svc current service or service start date.

TIP: You might define FrozSvc89 using the expression  (1/1/1989 #YEARDIF DateOfHire) #MAX 0.

ALTERNATIVE: For a plan whose benefit formula accrues over service but is not salary-related (e.g., the benefit accrual is a stated dollar amount for each year of service), it may be possible to use a single Accrual Definition type of Benefit Formula Component for (A) and (B), provided that the benefits for past and future service do not require separate components for a purpose other than prorating the frozen benefit. Although a benefit that is not salary-related generally can be coded with either a Final Average or Career Average format, it is necessary to use the Career Average format in order to prorate the frozen benefit over service up to 1/1/1989. ProVal will ask you for three items, to which you should respond:

Accrual Basis  the annual dollar multiplier

Accrual Rates  1, possibly with a cap

Accrued Benefit  the database field containing the accrued benefit as of the valuation date.

For decrement dates prior to the valuation date, ProVal will prorate the accrued benefit (i.e., Accrued Benefit) based on the Accrual Rate pattern you specify.

See also the FAQ regarding the related situation of updating a past service benefit for salary increases.