We don’t. The plan uses mortality factors for a variety of reasons, including funding adequacy, tax deductions, and trend analysis. In many cases they are influenced by the requirements of various statues. None is valid for determining the present value (lump sum) value of the benefits of an ex-employee once the payments leave the plan. Mortality tables used to administer the plan tend to be based on demographics determined from group data. In contrast, those used in divorce calculations tend to be based on demographics based on individual data.
Posted in: Calculations & Methodology
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