RMI 3503 Study Guide - Final Guide: Pension, Annuity, Traditional Ira

• School: Temple University
• Department: Risk Management and Insurance
• Course: RMI 3503
• Professor: J.Volkman Wise

Document Summary

The qpsa & qjsa: death benefit pre-retirement vs. post-retirement? (dc vs. db) Db: benefit has to be equal to what would be obtained from qjsa, assumes ee retired day before death. Dc: benefit equal to annuity for life of living spouse that is at least actuarial equivalent to 50% of vested account balance, this is the minimum and most ers have the entire account balance going to the survivor. Survivor annuity has to equal at least 50% of annuity the ee was receiving. They offer another distribution option other than a life annuity (lump sum option) Retirement plans offer disability provisions to help ees in case of disability. If ee leave er b/c of disability, ee is usually 100% vested in ret. benefit. For dc plan, often ers allow payout of benefits at time of disability. Look @ life expectancy assuming they hit retirement age, it"s a better predictor than from birth. Methods to estimate standard of living: replacement ratio.