presentation team 6 - university of california, los angelesactuary/casecompetition/case... · 2018....
TRANSCRIPT
AOFF ConsultingAustin Hunt / Natalie Joseph / Jianzhen Wang / Jiahui Zhou
Introduction
Actuarial Funding Valuation
Recommendation forActive Retirement Rates
Age Current New55 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 New64 40% 30%65 100% 30%66 100% 30%67 100% 30%68 100% 30%69 100% 30%70 100% 65%71 100% 100%
Assumptions Review
Active Retirement RatesAge Rates55 5%56 5%57 5%58 5%59 5%60 10%61 10%62 20%63 30%64 40%65 100%
Active Retirement RatesMr. Switch, born in 2000
Age 60 in 2060
Retire in 2060 – 2061: 10%
Age Rates55 5%… …60 10%… …
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 8EXPOSURE 51 72 54 46 44
← EVENTS← TRIALS
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 8EXPOSURE 51 72 54 46 44
47267 # = 17.60%
← EVENTS← TRIALS
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
Activ
e Re
tirem
ent R
ates
Age Actual Rates Based on Valuation Data
17.60%
Active Retirement RatesSample
Proportion ESTIMATE PopulationProportion
0% 3% 5% 8% 10% 13% 15% 18% 20% 23% 25%
95%CONFIDENCE INTERVAL
N = 267P = 10%
Age Rates60 10%
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
Activ
e Re
tirem
ent R
ates
Age Current Assumption Confidence Interval
Active Retirement Rates with 95% Confidence Interval Around Current Assumption
10%
Age 60 CI
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
Activ
e Re
tirem
ent R
ates
Age Actual out of CIActual in CI Current Assumption
New Assumptions
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
Activ
e Re
tirem
ent R
ates
Age Actual
Active Retirement Rates
New Assumption 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
Activ
e Re
tirem
ent R
ates
Age Actual
Active Retirement Rates
New Assumption 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 73 74 75 76 77
Term
inat
edVe
sted
Retir
emen
t Rat
es
Age Actual Current AssumptionNew Assumption
Terminated Vested Retirement Rates
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
Activ
e Te
rmin
atio
nRa
tes
Age Actual Current AssumptionNew Assumption
Active Termination Rates
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
Activ
e Te
rmin
atio
nRa
tes
Age Actual Current AssumptionNew Assumption
Active Termination Rates
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
Activ
e Te
rmin
atio
nRa
tes
Age Actual Current AssumptionNew Assumption
Active Termination Rates
Liability
RETIRED• Commenced
Benefit
ACTIVE• Increase future
liability
TERMINATED• Vested• Not vested
Types of Participants
Active Retire
Terminated
ACTIVE RETIREMENT RATES
ACTIVE TERMINATIONRATES
TERMINATION VESTEDRETIREMENT RATES
Application of Rates
RetirementBenefit
Mortality
Discounting
Liability
RetirementDate
Methodology
$125 M
$132 M
$100
$105
$110
$115
$120
$125
$130
$135
Current New
Liab
ility
of A
ffect
ed G
roup
s(in
mill
ions
)$7M
Change in Liability
Conclusion
Thank You
Appendix I
CONFIDENCE INTERVAL
( P − ZP 1−P
N�
, P + ZP 1−P
N�
)
Appendix IIPlan 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
Appendix IIIPresent Value of Pension Payments for One Participant:
where i: investment returnt: retirement yearx: age at tyx: average years of service for age x group
$800 &yx & an'|∙ v2017−t
Avg yrsof service Age Assumption
ratesActive in
'18Still active
'18Act-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 0 4 $697,684
Appendix IV