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AOFF Consulting
Austin Hunt / Natalie Joseph / Jianzhen Wang / Jiahui Zhou
AOFF Consulting Austin Hunt / Natalie Joseph / Jianzhen Wang / - - PowerPoint PPT Presentation
AOFF Consulting Austin Hunt / Natalie Joseph / Jianzhen Wang / - - PowerPoint PPT Presentation
AOFF Consulting Austin Hunt / Natalie Joseph / Jianzhen Wang / Jiahui Zhou Introduction Actuarial Funding Valuation Recommendation for Active Retirement Rates Age Current New Age Current New 55 5% 5% 64 40% 30% 56 5% 5% 65 100%
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Actuarial Funding Valuation
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Recommendation for Active Retirement Rates
Age Current New 55 5% 5% 56 5% 5% 57 5% 5% 58 5% 5% 59 5% 10% 60 10% 20% 61 10% 25% 62 20% 30% 63 30% 30% Age Current New 64 40% 30% 65 100% 30% 66 100% 30% 67 100% 30% 68 100% 30% 69 100% 30% 70 100% 65% 71 100% 100%
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Assumptions Review
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Active Retirement Rates
Age Rates 55 5% 56 5% 57 5% 58 5% 59 5% 60 10% 61 10% 62 20% 63 30% 64 40% 65 100%
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Active Retirement Rates
- Mr. Switch, born in 2000
Age 60 in 2060
Retire in 2060 – 2061: 10%
Age Rates 55 5% … … 60 10% … …
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Active Retirement Rates
RATE = DECREMENTS EXPOSURE
# (Retire at Age 60) # (Age 60)
YEAR 2012 YEAR 2013 YEAR 2014 YEAR 2015 YEAR 2016 DECREMENTS 12 14 6 7 8 EXPOSURE 51 72 54 46 44
← EVENTS ← TRIALS
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Active Retirement Rates
RATE = DECREMENTS EXPOSURE
# (Retire at Age 60) # (Age 60)
YEAR 2012 YEAR 2013 YEAR 2014 YEAR 2015 YEAR 2016 DECREMENTS 12 14 6 7 8 EXPOSURE 51 72 54 46 44
47 267 # = 17.60%
← EVENTS ← TRIALS
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Active Retirement Rates Based on 2012-17 Valuation Data
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72
Active Retirement Rates
Age Actual Rates Based on Valuation Data
17.60%
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Active Retirement Rates
Sample Proportion
ESTIMATE
Population Proportion
0% 3% 5% 8% 10% 13% 15% 18% 20% 23% 25%
95% CONFIDENCE INTERVAL
N = 267 P = 10% Age Rates 60 10%
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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72
Active Retirement Rates
Age Current Assumption Confidence Interval
Active Retirement Rates with 95% Confidence Interval Around Current Assumption
10% Age 60 CI
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Active Retirement Rates with 95% Confidence Interval Around Current Assumption
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72
Active Retirement Rates
Age Actual out of CI Actual in CI Current Assumption
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New Assumptions
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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72
Active Retirement Rates
Age Actual
Active Retirement Rates
New Assumption Current Assumption
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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72
Active Retirement Rates
Age Actual
Active Retirement Rates
New Assumption Current Assumption
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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77
Terminated Vested Retirement Rates
Age Actual Current Assumption New Assumption
Terminated Vested Retirement Rates
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0% 5% 10% 15% 20% 25% 30% 35% 40% 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
Active Termination Rates
Age Actual Current Assumption New Assumption
Active Termination Rates
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0% 5% 10% 15% 20% 25% 30% 35% 40% 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
Active Termination Rates
Age Actual Current Assumption New Assumption
Active Termination Rates
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0% 5% 10% 15% 20% 25% 30% 35% 40% 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
Active Termination Rates
Age Actual Current Assumption New Assumption
Active Termination Rates
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Liability
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RETIRED
- Commenced
Benefit
ACTIVE
- Increase future
liability
TERMINATED
- Vested
- Not vested
Types of Participants
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Active Retire Terminated
ACTIVE RETIREMENT RATES ACTIVE TERMINATION RATES TERMINATION VESTED RETIREMENT RATES
Application of Rates
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Retirement Benefit Mortality Discounting
Liability
Retirement Date
Methodology
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$125 M $132 M
$100 $105 $110 $115 $120 $125 $130 $135
Current New Liability of Affected Groups (in millions)
$7M
Change in Liability
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Conclusion
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Thank You
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Appendix I
CONFIDENCE INTERVAL ( P − Z P 1−P N
- , P + Z P 1−P
N
- )
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Appendix II
Plan Provisions § Annuity = $800 × Years of Service § Retirement Age: normal 65, early 55 § Vesting: 100% after 5 years of service
Assumptions
§ Pre-retirement rates § Investment return: 7.5% § Mortality: age 80
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Appendix III
Present Value of Pension Payments for One Participant: where i: investment return t: retirement year x: age at t yx: average years of service for age x group
$800 & yx & an
'|∙ v2017−t
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Avg yrs
- f service
Age Assumption rates Active in '18 Still active '18 Act-ret '18 Liability 21.20 55 5% 44 42 2 $384,199 17.75 56 5% 41 39 2 $296,320 21.98 57 5% 33 32 2 $293,920 21.14 58 5% 38 36 2 $317,287 23.77 59 5% 48 46 2 $446,273 22.75 60 5% 47 44 2 $401,694 21.85 61 5% 34 32 2 $276,906 24.58 62 20% 24 19 5 $843,328 23.06 63 20% 21 17 4 $673,370 25.94 64 20% 14 12 3 $508,162 26.55 65 100% 4 4 $697,684
Appendix IV