Unit benefit formula with prospective amendments only
QUESTION: How can I code a plan benefit which is a dollar amount per month of service, but based on the year in which the service was earned? For example:
Calendar Year | Dollar Amount |
<= 1983 | 5.00 |
1984-1986 | 6.00 |
1987-1989 | 8.50 |
1990-1993 | 9.50 |
1994+ | 11.00 |
ANSWER: Use an Accrual Definition that is Basis x Cumulative Rate.
The Accrual Basis will be 12.
The Accrual Rates will be variable, with several rate tables:
Effective Date | Rate |
1/01/1900 | 5 |
1/01/1984 | 6 |
1/01/1987 | 8.5 |
1/01/1990 | 9.5 |
1/01/1994 | 11 |
NOTE: The factor of 12 is necessary in the Accrual Basis since we entered monthly amounts in the Accrual Rates.