TAX 9873 Lecture Notes - Lecture 27: Life Annuity, Life Table, Cash Balance Plan
Document Summary
Db plan: present value of the vested accrued benefit. As of the valuation date specified in the plan [most common = daily valuation] Must state the actuarial assumptions (interest rate, mortality assumptions) for qualification & definitely determinable. Present value calculated under plan assumption must be greater than the present value calculated using the applicable mortality table and applicable interest rate prescribed by irc 417(e)(3). An annuity is a payment method that contains life contingency component. Your life expectancy is 80, but you live til 100. You are an actuarial loss bc more expensive. You"re expected to retire @65, but die @55. You are an actuarial gain bc don"t have to pay benefits anymore. Annuity payments are usually level payments during the individual"s lifetime, made on a regular basis, such as monthly, quarterly, or annually. If for two lifetimes, the payment is for the participant"s life and for a surviving beneficiary"s life. joint and survivor annuity j&sa.
