OS/2 Shareware BBS: Finance

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OS/2 Help File | 1995-09-16 | 79KB | 2,182 lines

ΓòÉΓòÉΓòÉ 1. Actuarial Modeler for OS/2 Warp ΓòÉΓòÉΓòÉ Actuarial Modeler for OS/2 Warp provides a series of actuarial calculation modules useful in then evaluation, management, and administration of benefit payments (typically pension benefits provided from employer pension plans). This version of the program has the ability to calculate the Present Values of most common annuity benefits based on general mortality levels of the Canadian population. Sections of the on-line help system may describe features only available in the Commercial Release version of the program but may assist in evaluating the completeness and appropriateness of the program for your use. Comments, suggestions, and any ideas for improving the program are especially welcomed: Robert Bland & Associates Internet E-Mail: rbland@ibm.net 74 Bonacres Ave. Telephone: (416) 284-7359 Scarborough, Ontario, Canada M1C 3B9 ΓòÉΓòÉΓòÉ 1.1. License Information ΓòÉΓòÉΓòÉ "This version of Actuarial Modeler for OS/2 Warp has been placed in the public domain". As such, any user whether commercial, corporate, or individual may use it in any manner that they wish. Comments, suggestions, and any ideas for improving the program are especially welcomed: Robert Bland & Associates Internet E-Mail: rbland@ibm.net 74 Bonacres Ave. Telephone: (416) 284-7359 Scarborough, Ontario, Canada M1C 3B9 Caveats Mortality The Canadian Life Tables included in this program are representative of mortality rates of the general population of Canada in 1980-82. These tables may not be appropriate for use where mortality levels for a group are different from the general Canadian levels or where individuals exercise a degree of selection in choosing coverages. In valuing pension benefits in the United States, the 1983 Group Annuitant Mortality Table is commonly used. An actuary may be consulted in order to determine the appropriateness of a particular table to be used in valuing benefits for a given group. Interest Pensions are, by their very nature, long term arrangements. The choice of an interest assumption to be used in valuing benefits should relate to long-term rates of return that could be earned by funds set aside to provide the benefit. ΓòÉΓòÉΓòÉ <hidden> License Information ΓòÉΓòÉΓòÉ Actuarial Modeler for OS/2 Warp comes in various different license arrangements: Single User License In this form an individual, and that individual only, may run the program on any and all computers that he is using. Should he have different computers at home and at work, he is entitled to install the program on all computers that he uses. Commercial Single Site License This license permits all employees who work at a single location of a company to use the program. Should any employee have their own computers at home, this license extends to them installing and using the program on their home computers. The license for an employee's use of the program terminates when he ceases to be an employee of the company. 5 copies of the program will be provided on diskette, and it will be the company's responsibility for copying and/or distributing the program to its employees. Commercial Enterprise License This is an extension of the Commercial Single Site License whereby all employees of a company worldwide are licensed to use the program. Note that in this form, 10 copies of the program will be provided on diskette, and it will be the company's responsibility for copying and/or distributing the program to its offices and employees. University or Student Group Any group of students or persons associated with a school or university, or any group of actuarial students qualify for an educational discount as long as all of their programs are purchased at one time. Each license of this type is like a Single User License and continues with the individual even after they leave their school. A copy of the program on diskette will be provided for each license ordered. Pricing, in either Canadian or United States currency, is shown on the Ordering Information screen and an order form can be printed directly from that screen. Features included in the full commercial version of Actuarial Modeler for OS/2 Warp include the following: Full ability to create, manage, and use any mortality table desired. Created tables can either be modifyable or 'protected' so that they are known to be constant throughout an organization. The ability to import and export tables for sharing among other users of Actuarial Modeler for OS/2 Warp. This would be useful in a organizational or university setting. The interest assumption used to value annuities can be either a single rate, or a tiered set of rates. For example, in this version of the program a flat interest rate of 8.625% could be used in valuing annuities. In the full commercial version of Actuarial Modeler for OS/2 Warp, an interest assumption such as the following could be used: 9% through December 31, 1996 8.5% thereafter through December 31, 1998 8% thereafter through July 31, 2001 and 7.5% thereafter Provision could be made for up to 50 such interest tiers. All parameters and details for a calculation can be saved and recalled again at a later time. A certificate can be printed showing the details of an benefit or annuity and its calculated value. A complete amortization schedule can be printed for term certain annuities. A complete detail listing can be prepared for verifying the mathematical calculations behind the valuation of a benefit. Modules are provided for calculating, displaying, and printing a set of standard actuarial equivalents for a given benefit. For example, if an individual was entitled to a pension of $700 per month with no guarantee period beginning at age 65, then calculations could be performed and a certificate prepared showing actuarially equivalent pensions beginning at age 60 guaranteed 0, 5, or 10 years, as well as in joint and survivorship form of pension with 50%, 66%, 75% or 100% continuing to the survivor. ΓòÉΓòÉΓòÉ <hidden> About Actuarial Modeler ΓòÉΓòÉΓòÉ This screen provides basic information about Actuarial Modeler for OS/2 Warp. The following pushbuttons provide the indicated actions: This pushbutton dismisses the dialog box. This pushbutton displays license information about what this version of Actuarial Modeler for OS/2 Warp may be used for. This pushbutton describes features available in the full commercial version of Actuarial Modeler for OS/2 Warp, pricing, and provides a function for printing out an order form. ΓòÉΓòÉΓòÉ <hidden> Order Form Details Help ΓòÉΓòÉΓòÉ This form is fairly straightforward with the following 4 sections: Type of License Select the radiobutton that corresponds to the type of license you'd like. At the right side of the screen, the payment amount will automatically be adjusted for the type of license selected. Currency Select the form of currency that you want to use. The payment amount will automatically be adjusted for the correct form of currency. Name of Licensee Enter a name and address to which the license will be registered. This doesn't have to be a be a complete mailing address but may be in a form such as the following: Henry Jones Charlotte, South Carolina or The XYZ Company 501 Bay St. Toronto or, simply The University of South Battleford If telephone or e-mail information is entered, then it will be used for notifying you of new versions or product information. Shipping Information Enter complete address information for where the program is to be shipped. ΓòÉΓòÉΓòÉ 1.2. Keyboard Shortcuts ΓòÉΓòÉΓòÉ Several keys throughout Actuarial Modeler for OS/2 Warp have been configured to perform standard operations. These are: Esc Always escapes from the current operation. Pressing the Esc key will always perform as if the Cancel Pushbutton had been selected. F1 or Alt-? or Ctrl-? Always provides context sensitive help for the current field or screen being displayed. Pressing one of these combinations will be equivalent to selecting the Help Pushbutton if one is displayed. F3 Always proceeds with the current operation. Pressing the F3 function key will always be equivalent to selecting the Go or OK Pushbutton if one is shown on the screen. ΓòÉΓòÉΓòÉ 1.3. Entering Dates in Actuarial Modeler ΓòÉΓòÉΓòÉ Actuarial Modeler for OS/2 Warp has been designed to accept dates entered in a variety of formats. For example, the following entries are all valid entries for February 27th, 1956: 27/02/56 27/feb/56 02/27/56 2.27.56 Feb2/56 56.2.21 Where a date may be ambiguous, such as 1/2/34 (ie. Does that mean January 2, 1934 or February 1, 1934?), the settings for date preference (menuitem User Configuration under the Environment menu on the main program window) will help the program in the interpretation. Actuarial Modeler for OS/2 Warp always displays the full text of a date entry to avoid any misunderstandings. ΓòÉΓòÉΓòÉ 2. Main Window ΓòÉΓòÉΓòÉ From the main entry window of the program, you can select from several broad choices to proceed with a task that you want to do. Please double-click on any of of the following entries for a more complete description of items and functions available. Environment Allows you to configure several options for the program Decrements Lets you add, modify, or print Decrement Tables as well as import or export them for sharing with other users of Actuarial Modeler for OS/2 Warp Calculations Provides a selection of several calculation modules that can be run Utilities Several useful utilities for managing your computer - particularly files on the hard disk Help An entry point to this comprehensive help facility ΓòÉΓòÉΓòÉ 2.1. Environment Menu ΓòÉΓòÉΓòÉ The Environment menu is designed to let the user configure optional settings within Actuarial Modeler for OS/2 Warp Functions that are available are: User Configuration Lets you configure the legislative environment that may govern any pension benefits, as well as specify your preferences for inputting dates. Corporate Pension Plan Valuation Mode Lets you see the outline of a future program for performing actuarial valuations of company pension plans. Exit Provides a method of exiting from Actuarial Modeler for OS/2 Warp ΓòÉΓòÉΓòÉ 2.2. Decrements Menu ΓòÉΓòÉΓòÉ The Decrements menu is designed to let the user inspect, modify, add, delete, and otherwise manage decrement tables used in the valuation of benefits. Functions that are available are: Add Lets you enter a new decrement table for use in Actuarial Modeler for OS/2 Warp by presenting a form for direct entry of the rates. Inspect/Modify Lets you inspect or modify the rates and characteristics of decrement tables that are already available. Note! When a table is created, the user may set it to be a Protected table, in which case rates and characteristics may not be modified. Delete Lets you delete tables that are no longer needed (unless they have been created with the Protected attribute). Print Initiates a background task to print one or more selected decrement tables. Import Provides a method for importing tables that other users of Actuarial Modeler for OS/2 Warp have created. Export Provides a method for exporting tables that have been created so that they may be used by other people running Actuarial Modeler for OS/2 Warp. ΓòÉΓòÉΓòÉ <hidden> Help for Inspect Decrement Tables ΓòÉΓòÉΓòÉ Choose one of the tables shown in the listbox, and then select the pushbutton to examine its rates. The pushbutton will exit from this dialog without proceeding. ΓòÉΓòÉΓòÉ <hidden> Print Decrement Tables Help ΓòÉΓòÉΓòÉ This screen will create a listing of one or more decrement tables to be sent to a system printer. Choose one or more tables that you want to print and then select one of the following Pushbuttons. OK To proceed with printing the decrement tables. Cancel To abandon the printing operation without sending anything to the printer. Help To display this help screen. See also: Actuarial Modeler Keys for help with keyboard shortcuts ΓòÉΓòÉΓòÉ 2.3. Calculations Menu ΓòÉΓòÉΓòÉ The Calculations menu provides menu entries for performing the central calculation functions of Actuarial Modeler for OS/2 Warp. Functions that are available are: Commuted Values This is a generalized module for calculating commuted values (or present values, if you will) of all types of annuities. A general screen is presented showing all relevant information for the benefit being valued and at the bottom is shown the value of that benefit. Because some fields are specific to certain forms of benefits, the following three menu entries lead to screens that are more tailored to their specific form of benefit: Term Certain Annuity Value This leads to a screen for valuing term certain annuities only Single Life Annuity Value This leads to the screen for valuing all forms of single life annuities. Joint Life Annuity Value This leads to the screen for valuing all forms of joint life annuities. See also: Overview of the Commuted Value Screens ΓòÉΓòÉΓòÉ 2.3.1. Overview of the Commuted Value Screens ΓòÉΓòÉΓòÉ There can be many parameters involved in the valuation of annuities. The particular parameters involved depend upon whether it is a life or term certain annuity, whether immediate or deferred, whether there's an associated death benefit or not, and so on. One guiding principle behind the Actuarial Modeler for OS/2 Warp commuted value screens is to only show those fields that are relevant to the current benefit shown on the screen. Thus, for example, if there is no reduction in an annuity amount, then the date of the reduction is not relevant and would only clutter the screen or confuse the user if it were shown. Therefore the screen is kept as simple as possible for the benefit being valued. A second guiding principle of Actuarial Modeler for OS/2 Warp is that the screen at all times should describe a valid benefit. The idea is for the user to review the parameters shown for the annuity he's valuing and adjust them one by one until the his benefit is described exactly. Each field is associated with descriptive on-line help as an aid to data input. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Percentage to Survivor Help ΓòÉΓòÉΓòÉ Enter the percentage of the original pension that will continue to the Joint Annuitant if they survive after the death of the Primary Annuitant. Note! Entering 100% will change the pension to a non-reducing form. Entering 0% has the effect of specifying a pension that is payable only for as long as the primary annuitant is alive (a Single Life annuity). See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Percentage to Survivor Help ΓòÉΓòÉΓòÉ Enter the percentage of the original pension that will continue to the survivor after the death of either the Annuitant or the Joint Annuitant. Note! Entering 100% will change the pension to a non-reducing form. Entering 0% has the effect of specifying a pension that is payable only as long as both annuitants are alive. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Guarantee Period Help ΓòÉΓòÉΓòÉ Guarantees have the purpose of ensuring that there will be a minimum payout in the event of early death of the annuitant or annuitants. These usually take the form of guaranteeing that a minimum number of payments will be made or a minimum amount shall be paid out. Cash Refund Annuities were developed by the insurance industry as a guarantee that should an annuitant die before receiving payments that at least totalled the premium he paid, then the difference would be paid as a lump sum to his beneficiary or estate. Modified Cash Refund Annuities were developed in the pension field to handle pensions that were partly provided by employer contributions and partly by employee contributions. The guarantee in this form was that at least the amount of employee contributions would be paid. The Modified Cash Refund With Interest form treats the guarantee amount as if it were in a side account earning interest. Anything left in the account upon the annuitant's death would be paid as a lump sum to his beneficiary or estate. Selection from this combo-box can be made using either the mouse (double-click on the combo-box selection button) or the Up or Down keys of the keyboard. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Guarantee Period Help ΓòÉΓòÉΓòÉ Enter the number of payments that are guaranteed to be made. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Help for Joint Reducing Guarantee Type ΓòÉΓòÉΓòÉ The question of how a guarantee period applies to a joint reducing pension is as follows: "In the event of a death before the guarantee period has expired, does the guarantee apply to the initial level of the pension, or only to the reduced amount that would have been paid to the survivor?" A selection can be made from this combo-box using either the mouse (double-click on the combo-box selection button) or the Up or Down keys of the keyboard. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Help for Death Before Pension Commencement ΓòÉΓòÉΓòÉ There are often special death benefits that are part of deferred annuity contracts where annuity payments are deferred into the future. Should the annuitant die before payments are scheduled to begin, the following types of benefits could be paid: No Benefits No benefits would be paid, even if the annuity would otherwise have had a guarantee period. Guaranteed Payments, if any, would be Paid If the annuity has a guarantee period or is of a Cash Refund form, then the guaranteed payments would be made to the annuitant's beneficiary or estate. If there was no guarantee period, no benefits would be paid. A Flat, Lump Sum, Death Benefit would be Paid Instead of any annuity payments, a flat, lump sum death benefit would be paid to the annuitant's beneficiary or estate. An Amount with Interest would be Paid Like the above, a death benefit would be paid to the annuitant's beneficiary or estate, but the amount of the payment would increase with interest over time. A selection can be made from this combo-box using either the mouse (double-click on the combo-box selection button) or the Up or Down keys of the keyboard. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Help for Death Before Pension Commencement ΓòÉΓòÉΓòÉ There are often special death benefits that are part of deferred annuity contracts where annuity payments are deferred into the future. Should the primary annuitant die before payments are scheduled to begin, the following types of benefits could be paid: No Benefits No benefits would be paid, even if the annuity would otherwise have had a guarantee period or if there was a surviving Joint Annuitant. Payments would be made to the Joint Annuitant Annuity payments would continue as scheduled to the Joint Annuitant. A Flat, Lump Sum, Death Benefit would be Paid Instead of any annuity payments, a flat, lump sum death benefit would be paid to the annuitant's beneficiary or estate. An Amount with Interest would be Paid Like the above, a death benefit would be paid to the annuitant's beneficiary or estate, but the amount of the payment would increase with interest over time. A selection can be made from this combo-box using either the mouse (double-click on the combo-box selection button) or the Up or Down keys of the keyboard. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Guarantee Period Help ΓòÉΓòÉΓòÉ Enter the number of years that payments are guaranteed to be made. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Cash Refund Amount Help ΓòÉΓòÉΓòÉ Modified Cash Refund Annuities were developed in the pension field to handle pensions that were provided by contributions. The guarantee is that should an annuitant die before receiving payments that at least total a given amount, then the difference will be paid as a lump sum to his beneficiary or estate. Enter the amount of the cash refund guarantee. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Death Benefit Amount Help ΓòÉΓòÉΓòÉ Enter the amount of the death benefit that would be paid in the event of death before pension commencement. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Death Benefit Amount Help ΓòÉΓòÉΓòÉ Enter the amount of the death benefit that would be paid in the event of the primary annuitant's death before pension commencement. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Cash Refund Amount Help ΓòÉΓòÉΓòÉ Modified Cash Refund Annuities were developed in the pension field to handle pensions that were provided by contributions. The guarantee is that should an annuitant die before receiving payments that at least total a given amount, then the difference will be paid as a lump sum to his beneficiary or estate. The Modified Cash Refund With Interest form treats the guarantee amount as if it were in a side account earning interest. Anything left in the account upon the annuitant's death would be paid as a lump sum to his beneficiary or estate. Enter the amount of the cash refund guarantee. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Cash Refund Interest Rate Help ΓòÉΓòÉΓòÉ Enter the annual rate of interest that the Modified Cash Refund Guarantee Amount will grow by. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Death Benefit Interest Rate Help ΓòÉΓòÉΓòÉ Enter the annual rate of interest that the Death Benefit Amount will grow by. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Help for Cash Refund Interest Accrual Date ΓòÉΓòÉΓòÉ Enter the date from which the Cash Refund Amount will accrue interest. Actuarial Modeler for OS/2 Warp has been designed to accept dates entered in a variety of formats. For example, the following entries are all valid entries for February 27th, 1956: 27/02/56 27/feb/56 02/27/56 2.27.56 Feb2/56 56.2.21 Where a date may be ambiguous, such as 1/2/34 (ie. Does that mean January 2, 1934 or February 1, 1934?), the settings for date preference (menuitem User Configuration under the Environment menu on the main program window) will help the program in the interpretation. Actuarial Modeler for OS/2 Warp always displays the full text of a date entry to avoid any misunderstandings. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Help for Death Benefit Interest Accrual Date ΓòÉΓòÉΓòÉ Enter the date from which the Death Benefit Amount will accrue interest. Actuarial Modeler for OS/2 Warp has been designed to accept dates entered in a variety of formats. For example, the following entries are all valid entries for February 27th, 1956: 27/02/56 27/feb/56 02/27/56 2.27.56 Feb2/56 56.2.21 Where a date may be ambiguous, such as 1/2/34 (ie. Does that mean January 2, 1934 or February 1, 1934?), the settings for date preference (menuitem User Configuration under the Environment menu on the main program window) will help the program in the interpretation. Actuarial Modeler for OS/2 Warp always displays the full text of a date entry to avoid any misunderstandings. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Pension Type ΓòÉΓòÉΓòÉ Actuarial Modeler for OS/2 Warp has been designed to value three types of annuities: Term Certain Annuities These are annuities whose payment pattern is fixed and doesn't depend upon whether or not an individual is living at the time of payment. Single Life Annuities These are otherwise known as pension arrangements whereby future payments may be contingent upon a person surviving to the time of payment. Joint Life Annuities These are pensions paid jointly to 2 people (typically the annuitant and their spouse). Payments and the payment amounts may be contingent upon either or both of the annuitants surviving to the date of payment. To clarify some arrangements where the pension amount may reduce on an employee's death but not on the death of his or her spouse, the persons receiving the pension are identified as a Primary Annuitant and a Joint Annuitant. The type of annuity you wish to value may be selected from the Pension Type listbox with either the mouse or keyboard controls. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Pension Duration Help ΓòÉΓòÉΓòÉ Enter the type of duration for the annuity. The available types are: Payable for Life These are life pensions which will continue for as long as the annuitant (or annuitants) is living. Until a Stop Date This is a temporary annuity which will be paid for as long as an annuitant is living but not past a certain date. For a Number of Payments This is another way of specifying a temporary annuity by giving the maximum number of payments that will be made. For a Number of Years This is another way of specifying a temporary annuity by giving the maximum number of years that payments will be made. The type of duration you wish to value may be selected from the listbox with either the mouse or keyboard controls. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Annuity Duration Help ΓòÉΓòÉΓòÉ Enter the type of duration for the annuity. The available types are: Until a Stop Date Use this form to specify the date at which annuity payments will stop. For a Number of Payments This is another way of specifying the duration of an annuity by giving the number of payments that will be made. For a Number of Years This is another way of specifying the duration of an annuity by giving the number of years that payments will be made. The type of duration you wish to value may be selected from the listbox with either the mouse or keyboard controls. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Help for Present Value ΓòÉΓòÉΓòÉ This field shows the Present Value as at the requested date of the annuity detailed on the screen. Note!If the payment amount is constant (ie. no reductions or increases), then you can enter a present value here and the program will work backwards and calculate the payment amount. If you enter an amount here, it may be rounded slightly so that the the individual payment amounts are exact. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Actuarial Present Value ΓòÉΓòÉΓòÉ This field shows the Actuarial Present Value as at the requested date of the benefit detailed on the screen. Note!If the payment amount is constant (ie. no reductions or increases), then you can enter a present value here and the program will work backwards and calculate the payment amount. If you enter an amount here, it may be rounded slightly so that the the individual annuity payment amounts are exact. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Annuitant's Sex ΓòÉΓòÉΓòÉ Males and females have been observed to have different mortality patterns throughout the world. These differences result from a combination of various sociological, biological, and economic factors that impact males and females differently. Thus, in order to value a pension benefit, the sex of the annuitant needs to be established. Select either of Male or Female from this combo-box using either the mouse (double-click on the combo-box selection button) or the Up or Down keys of the keyboard. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Joint Annuitant's Sex ΓòÉΓòÉΓòÉ Males and females have different mortality patterns and thus it is necessary to know the Joint Annuitant's sex in order to value a joint pension benefit. Select either of Male or Female from this combo-box using either the mouse (double-click on the combo-box selection button) or the Up or Down keys of the keyboard. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Annuitant's Date of Birth ΓòÉΓòÉΓòÉ Enter the annuitant's date of birth in this entryfield. Actuarial Modeler for OS/2 Warp has been designed to accept dates entered in a variety of formats. For example, the following entries are all valid entries for February 27th, 1956: 27/02/56 27/feb/56 02/27/56 2.27.56 Feb2/56 56.2.21 Where a date may be ambiguous, such as 1/2/34 (ie. Does that mean January 2, 1934 or February 1, 1934?), the settings for date preference (menuitem User Configuration under the Environment menu on the main program window) will help the program in the interpretation. Actuarial Modeler for OS/2 Warp always displays the full text of a date entry to avoid any misunderstandings. NOTE! Annuitants in the Actuarial Modeler program must be between the ages of 1 and 120 inclusive. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Annuity Start Date Help ΓòÉΓòÉΓòÉ Enter the date that the annuity starts. Actuarial Modeler for OS/2 Warp has been designed to accept dates entered in a variety of formats. For example, the following entries are all valid entries for February 27th, 1956: 27/02/56 27/feb/56 02/27/56 2.27.56 Feb2/56 56.2.21 Where a date may be ambiguous, such as 1/2/34 (ie. Does that mean January 2, 1934 or February 1, 1934?), the settings for date preference (menuitem User Configuration under the Environment menu on the main program window) will help the program in the interpretation. Actuarial Modeler for OS/2 Warp always displays the full text of a date entry to avoid any misunderstandings. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Annuity Stop Date Help ΓòÉΓòÉΓòÉ Enter the date that the annuity will stop. Actuarial Modeler for OS/2 Warp has been designed to accept dates entered in a variety of formats. For example, the following entries are all valid entries for February 27th, 1956: 27/02/56 27/feb/56 02/27/56 2.27.56 Feb2/56 56.2.21 Where a date may be ambiguous, such as 1/2/34 (ie. Does that mean January 2, 1934 or February 1, 1934?), the settings for date preference (menuitem User Configuration under the Environment menu on the main program window) will help the program in the interpretation. Actuarial Modeler for OS/2 Warp always displays the full text of a date entry to avoid any misunderstandings. NOTE! Depending upon the annuity start date and the payment frequency, the Stop Date may be adjusted by the program to fall on an annuity payment date. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Reduction Date Help ΓòÉΓòÉΓòÉ Enter the date that the annuity will decrease. Actuarial Modeler for OS/2 Warp has been designed to accept dates entered in a variety of formats. For example, the following entries are all valid entries for February 27th, 1956: 27/02/56 27/feb/56 02/27/56 2.27.56 Feb2/56 56.2.21 Where a date may be ambiguous, such as 1/2/34 (ie. Does that mean January 2, 1934 or February 1, 1934?), the settings for date preference (menuitem User Configuration under the Environment menu on the main program window) will help the program in the interpretation. Actuarial Modeler for OS/2 Warp always displays the full text of a date entry to avoid any misunderstandings. NOTE! Depending upon the annuity start date and the payment frequency, the Reduction Date that you enter may be adjusted by the program to fall on an annuity payment date. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Increase Date Help ΓòÉΓòÉΓòÉ Enter the date that the annuity will increase. Actuarial Modeler for OS/2 Warp has been designed to accept dates entered in a variety of formats. For example, the following entries are all valid entries for February 27th, 1956: 27/02/56 27/feb/56 02/27/56 2.27.56 Feb2/56 56.2.21 Where a date may be ambiguous, such as 1/2/34 (ie. Does that mean January 2, 1934 or February 1, 1934?), the settings for date preference (menuitem User Configuration under the Environment menu on the main program window) will help the program in the interpretation. Actuarial Modeler for OS/2 Warp always displays the full text of a date entry to avoid any misunderstandings. NOTE! Depending upon the annuity start date and the payment frequency, the Increase Date that you enter may be adjusted by the program to fall on an annuity payment date. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Change Date Help ΓòÉΓòÉΓòÉ Enter the date that the amount of the annuity will change. Actuarial Modeler for OS/2 Warp has been designed to accept dates entered in a variety of formats. For example, the following entries are all valid entries for February 27th, 1956: 27/02/56 27/feb/56 02/27/56 2.27.56 Feb2/56 56.2.21 Where a date may be ambiguous, such as 1/2/34 (ie. Does that mean January 2, 1934 or February 1, 1934?), the settings for date preference (menuitem User Configuration under the Environment menu on the main program window) will help the program in the interpretation. Actuarial Modeler for OS/2 Warp always displays the full text of a date entry to avoid any misunderstandings. NOTE! Depending upon the annuity start date and the payment frequency, the Change Date that you enter may be adjusted by the program to fall on an annuity payment date. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Calculation Date Help ΓòÉΓòÉΓòÉ Enter the date as at which you want to value the benefit. Actuarial Modeler for OS/2 Warp has been designed to accept dates entered in a variety of formats. For example, the following entries are all valid entries for February 27th, 1956: 27/02/56 27/feb/56 02/27/56 2.27.56 Feb2/56 56.2.21 Where a date may be ambiguous, such as 1/2/34 (ie. Does that mean January 2, 1934 or February 1, 1934?), the settings for date preference (menuitem User Configuration under the Environment menu on the main program window) will help the program in the interpretation. Actuarial Modeler for OS/2 Warp always displays the full text of a date entry to avoid any misunderstandings. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Help for Annuity Amount ΓòÉΓòÉΓòÉ Enter the amount of the annuity. This can be expressed as either an amount per payment, or an amount per year. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Help for Changed Amount ΓòÉΓòÉΓòÉ Enter the revised payment amount. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Help for Reduction Amount ΓòÉΓòÉΓòÉ Enter the amount by which payments will decrease. Note! Entering a negative amount will signify that payments will Increase. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Help for Increase Amount ΓòÉΓòÉΓòÉ Enter the amount by which payments will increase. Note! Entering a negative amount will signify that payments will Decrease. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Help for Type of Amount ΓòÉΓòÉΓòÉ Choose from Per Payment, or Per Year to correspond with the amount that has been entered. Selection from this combo-box can be made using either the mouse (double-click on the combo-box selection button) or the Up or Down keys of the keyboard. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Help for Whether Payments Change ΓòÉΓòÉΓòÉ Often, the payment amount of an annuity will change at some point after it has started. An example of this would be a pension integrated with governmental benefits where there would be a higher payment initially reducing by the amount of the governmental benefits when they are scheduled to begin. The selections available in this combo-box are: No Change Payments under the annuity will not change from the initial amount. By an Amount The amount of the increase or decrease will be entered. To an Amount The revised payment amount will be entered. Selection from this combo-box can be made using either the mouse (double-click on the combo-box selection button) or the Up or Down keys of the keyboard. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Help for Timing of Payment ΓòÉΓòÉΓòÉ Under some pension plans, an individual retires and receives his pension on the 1st of every month. Under other plans, his cheque is issued at the end of the month. Obviously, the values of the two forms of arrangement are different by the extra month's interest on each pension payment. The choices available under Actuarial Modeler for OS/2 Warp are: Beginning of the Period In this model, an individual receives his first pension payment of the date that he retires. For each subsequent period, if he is alive at the beginning of the period, then he will receive a payment also at the beginning of the period. End of Period Under this model, the determination of whether a payment will be made is whether the individual is alive at the beginning of the period. The actual payment, however, will not be made until the end of the period. Middle of Period This is presented as a compromise between the previous two options. Selection from this combo-box can be made using either the mouse (double-click on the combo-box selection button) or the Up or Down keys of the keyboard. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Help for Timing of Payment ΓòÉΓòÉΓòÉ Under some pension plans, an individual retires and receives his pension on the 1st of every month. Under other plans, his cheque is issued at the end of the month. Obviously, the values of the two forms of arrangement are different by the extra month's interest on each pension payment. The choices available under Actuarial Modeler for OS/2 Warp are: In Advance In this model, an individual receives his first pension payment of the date that he retires. For each subsequent period, if he is alive at the beginning of the period, then he will receive a payment also at the beginning of the period. In Arrears Under this model, the determination of whether a payment will be made is whether the individual is alive at the beginning of the period. The actual payment, however, will not be made until the end of the period. Selection from this combo-box can be made using either the mouse (double-click on the combo-box selection button) or the Up or Down keys of the keyboard. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Help for Timing of Payment ΓòÉΓòÉΓòÉ Under most loan arrangements, an individual receives his money and makes payments at the end of every period. Under other arrangements, the first payment is due at the time the loan is received, and at the beginning of every period thereafter. Obviously, the values of the two forms of arrangement are different by the extra month's interest on each payment. The choices available under Actuarial Modeler for OS/2 Warp are: In Advance In this model, payments are made at the beginning of every period. In Arrears Under this model, payments are made at the end of evey period. Selection from this combo-box can be made using either the mouse (double-click on the combo-box selection button) or the Up or Down keys of the keyboard. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Help for Annuity Frequency ΓòÉΓòÉΓòÉ Choose the payment frequency from the list of choices that are available. Selection from this combo-box can be made using either the mouse (double-click on the combo-box selection button) or the Up or Down keys of the keyboard. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Help for Number of Years ΓòÉΓòÉΓòÉ Enter the number of years that annuity payments will be made. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Help for Number of Payments ΓòÉΓòÉΓòÉ Enter the number of annuity payments that will be made. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Joint Annuitant's Date of Birth ΓòÉΓòÉΓòÉ Enter the Joint Annuitant's date of birth in this entryfield. Actuarial Modeler for OS/2 Warp has been designed to accept dates entered in a variety of formats. For example, the following entries are all valid entries for February 27th, 1956: 27/02/56 27/feb/56 02/27/56 2.27.56 Feb2/56 56.2.21 Where a date may be ambiguous, such as 1/2/34 (ie. Does that mean January 2, 1934 or February 1, 1934?), the settings for date preference (menuitem User Configuration under the Environment menu on the main program window) will help the program in the interpretation. Actuarial Modeler for OS/2 Warp always displays the full text of a date entry to avoid any misunderstandings. NOTE! Annuitants in the Actuarial Modeler program must be between the ages of 1 and 120 inclusive. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Primary Annuitant's Sex ΓòÉΓòÉΓòÉ Males and females have been observed to have different mortality patterns throughout the world. These differences result from a combination of various sociological, biological, and economic factors that impact males and females differently. Thus, in order to value a pension benefit, the sex of the annuitant needs to be established. Because payments under many forms of joint pensions may depend upon which of the annuitants is living, it is necessary to identify the annuitants as being a Primary and a Joint annuitant. Select either of Male or Female from this combo-box using either the mouse (double-click on the combo-box selection button) or the Up or Down keys of the keyboard. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Male Mortality Table Help ΓòÉΓòÉΓòÉ Select one of the mortality tables available to the program to be used for projecting mortality and survival rates for male annuitants. Selection from this combo-box can be made using either the mouse (double-click on the combo-box selection button) or the Up or Down keys of the keyboard. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Female Mortality Table Help ΓòÉΓòÉΓòÉ Select one of the mortality tables available to the program to be used for projecting mortality and survival rates for female annuitants. Selection from this combo-box can be made using either the mouse (double-click on the combo-box selection button) or the Up or Down keys of the keyboard. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Mortality Table Adjustment Help ΓòÉΓòÉΓòÉ Often, one can come across a situation where an actuary makes an age adjustment to a mortality table in order to compensate for expected mortality table differences between a group and an available mortality table. Thus, it's common to see, for example, female rates being approximated by using a male table with an age setback. That is to say that if female mortality is to be calculated from a male table setback 5 years, then the expected mortality rate for a female aged x will be taken from the table rate for a male aged x-5. Another example of applying an age adjustment to a table might be where a table is deemed to be out of date. If general mortality rates had improved in Canada since the 1980-82 tables were derived, then it may be appropriate to use a 1 year age set back in the table to reflect the improvment. That is to say, using an age adjustment of a 1 year age setback, the expected mortality for an individual aged x would be taken from the table rate for age x-1. One final example may be in the valuing of benefits for individuals with expected mortality known to be worse than the general population. If one is valuing benefits for known smokers, it may be appropriate to use an age setforward whereby the expected mortality for an individual aged x would be taken from the table rate for age x+n where n is deemed to be the mortality difference due to the factor of smoking. Selection of the adjustment method to use, if any, can be made from this combo-box using either the mouse (double-click on the combo-box selection button) or the Up or Down keys of the keyboard. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Number of Years of Table Setback Help ΓòÉΓòÉΓòÉ Enter the number of years of setback to apply when using the mortality table. For example, if you enter 1, then you intend to apply a 1 year age setback in using the table. Expected mortality for an individual actually aged x will be taken from the mortality table rate for age x-1 Entering 0 will have the effect of specifying no adjustment. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Help for Number of Years of Table Set Forward ΓòÉΓòÉΓòÉ Enter the number of years of age set forward to apply when using the mortality table. For example, if you enter 5, then you intend to apply a 5 year age set forward in using the table. Expected mortality for an individual actually aged x will be taken from the mortality table rate for age x+5 Entering 0 will have the effect of specifying no adjustment. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Interest Rate Assumption ΓòÉΓòÉΓòÉ The interest rate assumption is used in discounting the present value of future payments. Enter a rate between 0% and 1000% inclusive. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Interest Rate Assumption ΓòÉΓòÉΓòÉ The interest rate assumption is used in discounting the present value of future expected pension payments. Typically the interest rate assumption should be the rate of interest at which funds providing the pension could be invested. In choosing a rate, it is important to remember that pensions are normally paid over a long time span and that current rates of return may not be available beyond a few years into the future. Enter a rate between 0% and 1000% inclusive. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Interest Rate Compounding Frequency ΓòÉΓòÉΓòÉ Choose an entry corresponding to the frequency at which the interest rate is compounded. Selecting an entry from this combo-box can be done by using either the mouse (double-click on the combo-box selection button) or the Up or Down keys of the keyboard. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Annuity Type ΓòÉΓòÉΓòÉ Actuarial Modeler for OS/2 Warp has been designed to value three types of annuities: Term Certain Annuities These are annuities whose payment pattern is fixed and doesn't depend upon whether or not an individual is living at the time of payment. Single Life Annuities These are otherwise known as pension arrangements whereby future payments may be contingent upon a person surviving to the time of payment. Joint Life Annuities These are pensions paid jointly to 2 people (typically the annuitant and their spouse). Payments and the payment amounts may be contingent upon either or both of the annuitants surviving to the date of payment. To clarify some arrangements where the pension amount may reduce on an employee's death but not on the death of his or her spouse, the persons receiving the pension are identified as a Primary Annuitant and a Joint Annuitant. The type of annuity you wish to value may be selected from the Annuity Type listbox with either the mouse or keyboard controls. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Joint Annuity Type Help ΓòÉΓòÉΓòÉ There are three generic types of joint life annuities: Non Reducing These annuities continue at a level amount for as long as at least one of the joint annuitants is living. Reducing on Primary's Death This type of annuity continues at the initial payment amount for as long as the Primary Annuitant is living. Upon the death of the Primary Annuitant, if the Joint Annuitant is living, then a percentage of the initial payment amount will be paid to the Joint Annuitant for as long as they are alive. Reducing on First Death Under this form, the initial payment amount is paid for as long as both annuitants are alive. Upon the death of either annuitant, a percentage of the initial payment amount will be paid to the survivor. The type of Joint Annuity you wish to value may be selected from the Joint Annuity Type listbox with either the mouse or keyboard controls. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Mortality Interpolation Method Help ΓòÉΓòÉΓòÉ From the rates of a mortality table, methods must be used for determining the probability that an individual is living at fractional ages such as age 54 and 8 months. Actuaries have traditionally used one of three methods in this determination: Uniform Distribution of Deaths Under this method, deaths are assumed to occur uniformly throughout the year and thus the number of persons living at any fractional age is a simple interpolation between the number at the beginning of the year and the number at the end of the year. Constant Force of Mortality Under this method, mortality is seen as a constant force acting much like an interest force of discount. Following this methodology, survival throughout the year is an exponential function, and the probability that an individual aged 54 would live to age 54 and 8 months would be calculated as: where is the mortality rate at age 54. Balducci's Hypothesis Balducci, one of the early notable actuaries, postulated that the reciprocal of the survival function was linear. This hypothethis was especially useful in developing therory underlying the construction of mortality tables. Mathematically, Balducci's Hypothethis is expressed as: If you experiment with the different interpolation methods, you'll find that they are all quite close to one another in their valuation of benefits. Selection from this combo-box can be made using either the mouse (double-click on the combo-box selection button) or the Up or Down keys of the keyboard. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help Entering Dates in Actuarial Modeler General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ 2.4. Utilities Menu ΓòÉΓòÉΓòÉ The Utilities menu leads to general system utilities that are unrelated to actuarial science but that provide useful system information type functions that take advantage of the integrated functionality of Actuarial Modeler for OS/2 Warp. Functions that are available are: Temporary Files This function starts a background task that will search all HPFS and FAT disks for possible temporary files that may no longer be needed (such as .BAK, .TMP, or .OLD files, or files of 0 size). When the background search has finished, the number of files found is shown, and the list can be inspected, printed, and reviewed. Files that aren't needed can then be chosen for deletion. Files Needing Backup This entry starts a process that searches your system for files needing backup. The list can then be reviewed, and file attributes changed before you proceed to run your actual backup. Duplicate Files This item searches your system for possible duplicate files that may have been overlooked or forgotten. Internet Connect Time If you have installed the Internet Access Kit, this screen will analyse the file CONNECT.LOG to summarize your internet connect time by month. ΓòÉΓòÉΓòÉ 2.5. Temporary Files Help ΓòÉΓòÉΓòÉ Possible temporary or old work files found on your system are shown in the top listbox of this dialog. If your system is like mine, many of these files have been created as extra copies from installs or word processors and are no longer needed. If you see one or more files that you'd like to delete, then they can be selected and moved to the lower box with the pushbutton. Should you change your mind or make a mistake, you can remove a file from those to be deleted by selecting it and then the pushbutton. Once you have finalized your choices, the following functions are available: This leads to a final confirmation that you really want to delete the chosen files and then proceeds to delete them. This cancels the temporary files task without proceeding any further. This prepares a listing of the possible temporary files that will be sent to one of your system printers. This shows this help screen. ΓòÉΓòÉΓòÉ 2.6. Help for Files Needing Backup ΓòÉΓòÉΓòÉ Files not currently backed up are shown in the top listbox of this dialog. If your system is like mine, many of these files could be copies of files and programs installed from their original disks or CD-ROM's. If anything ever happened to your system, these packages could easilly be re-installed, and therefore there is no need to back them up again. Also, if you are a software developer like me, you create many source files which are then compiled into object files and linked into program files. For backup purposes, the only files that are critical are the source files, since the object and executable files can easillt be reconstructed. This screen may also be useful in that it may remind you of a forgotten set of files that haven't been backed up yet. If you see one or more files that you don't need to back up, then they can be selected and moved to the lower box with the pushbutton. Should you change your mind or make a mistake, you can remove a file from those to be marked as backed up by selecting it and then the pushbutton. Once you have finalized your choices, the following functions are available: This leads to a final confirmation that you really want to mark the chosen files as having already been backed up and then proceeds to start a process that will mark them. This cancels the Backup Files task without proceeding any further. This prepares a listing of files not backed up that will be sent to one of your system printers. This shows this help screen. ΓòÉΓòÉΓòÉ 2.7. Help for Duplicate Files ΓòÉΓòÉΓòÉ Duplicate files that have been found on your system are shown in the top listbox of this dialog. If your system is like mine, many of these files are just extra copies that have been forgotten. If you see one or more files that can be deleted, then they can be selected and moved to the lower box with the pushbutton. Should you change your mind or make a mistake, you can remove a file from those to be deleted up by selecting it and then the pushbutton. Once you have finalized your choices, the following functions are available: This leads to a final confirmation that you really want to delete the chosen files and then proceeds to delete them. This cancels the Temporary Files task without proceeding any further. This prepares a listing of duplicate files that will be sent to one of your system printers. This shows this help screen. This pushbutton is shown when the files shown have been sorted in filename order. Selecting this button will re-sort the files by their file extension. This pushbutton is shown when the files shown have been sorted by their file extensions. Selecting this button will re-sort the files by their root filename. ΓòÉΓòÉΓòÉ <hidden> Analysis of Internet Connect Log ΓòÉΓòÉΓòÉ This screen analyses the file CONNECT.LOG to summarize your internet connect time by month. Connect time for each month is shown in the format hours:minutes. The radio buttons shown at the top of the dialog box allow you to round your connect time according to the method used by your Internet Provider. Note that any entries under Open Connections mean that the time reported may not be accurate because of improper disconnections that were not recorded. ΓòÉΓòÉΓòÉ <hidden> Help for Mortality Table Rates ΓòÉΓòÉΓòÉ The rates shown in this table represent, according to the mortality model of this table, the probability that an indixidual aged x will die before attaining age x+1. See also: Overview of Actuarial Modeler Keyboard Shortcuts and Help General Description of the Commuted Value Screens Calculation Methodology of Actuarial Modeler ΓòÉΓòÉΓòÉ <hidden> Configuration Screen Help ΓòÉΓòÉΓòÉ This screen lets you configure your environment for running Actuarial Modeler for OS/2 Warp Legislative Environment These settings will be used in the future versions of Actuarial Modeler for OS/2 Warp in order to select any governmental rules, regulations, or restrictions that apply to pension plan valuation or administration. Another use of these settings will be to identify which governmental pension plans are available in your jurisdiction. Date Preference This setting helps Actuarial Modeler for OS/2 Warp in determining how to interpret possible ambiguous date inputs such as 11.6.67 (ie. should that mean November 6th, or June 11th). The initial setting for this parameter has been determined from your OS2.INI configuration file, but this parameter lets you change how Actuarial Modeler for OS/2 Warp will interpret things. Program Sounds If your computer is Multimedia Enabled, and the supporting Actuarial Modeler Sound Library DLL has been installed, these parameters allow you to choose the volume level and types of sounds that are played in various sections of Actuarial Modeler for OS/2 Warp. ΓòÉΓòÉΓòÉ <hidden> Choose Printer Help ΓòÉΓòÉΓòÉ This screen lets you select the printer where where your output listing will be sent and/or select any optional printer setup parameters that you wish. The first step in using this dialog is to select the desired printer from those shown in the listbox. One of the following pushbuttons may then be selected: OK To proceed with printing the output listing on the selected printer. Cancel To abandon the printing operation without sending anything to the printer. Setup... To choose any printer specific settings or parameters that you may wish. Help To display this help screen. ΓòÉΓòÉΓòÉ <hidden> Choose Printer Help ΓòÉΓòÉΓòÉ This screen lets you select the printer where where your output listing will be sent and/or select any optional printer setup parameters that you wish. The first step is to fill in the 'Prepared For:' field. If a name is entered, this name will appear at the top of the certificate. If nothing is entered, the 'Prepared For:' line of the certificate will be skipped. The next step in using this dialog is to select the desired printer from those shown in the listbox. One of the following pushbuttons may then be selected: OK To proceed with printing the output listing on the selected printer. Cancel To abandon the printing operation without sending anything to the printer. Setup... To choose any printer specific settings or parameters that you may wish. Help To display this help screen. ΓòÉΓòÉΓòÉ 2.8. Help Menu ΓòÉΓòÉΓòÉ The Help menu leads to to entries in the help subsystem for Actuarial Modeler for OS/2 Warp. Functions that are provided are: Help Index This menu item leads to an index of broad help topics available in Actuarial Modeler for OS/2 Warp. General Help This entry describes the overall purpose of Actuarial Modeler for OS/2 Warp. Using Help This item describes, in general terms, help functions that are available in OS/2. Keys Help This entry describes keyboard shortcuts that are available within Actuarial Modeler for OS/2 Warp. About Actuarial Modeler... This leads to a screen showing version and copyright information about Actuarial Modeler for OS/2 Warp. Ordering Information This menu item leads to information about the fully functional commercial version of Actuarial Modeler for OS/2 Warp and how it may be ordered. ΓòÉΓòÉΓòÉ 3. Calculation Methodology ΓòÉΓòÉΓòÉ Actuaries have traditionally used used minor approximations in valuing annuities. Thus, for example, the value of an annuity for an individual aged 47 years, 8 months, and 12 days might be interpolated from the values for individuals 47, 8 months and 47, 9 months. Further, an annuity beginning 3 years, 4 months and 18 days in the future would be interpolated from values for 3 years, 4 months and 3 years, 5 months. Until recently, it wasn't practical to calculate values based on exact calculations of all variables involved. Today we have computers on our desktops that are each more powerful than the ones used to put a man on the moon, and it is feasible to perform thousands upon thousands of calculations in a very small fraction of a second. Actuarial Modeler for OS/2 Warp follows the philosophy that once the actuarial assumptions (or actuarial model, if you will) are chosen, then values should be calculated exactly, based on the underlying model. Pensions consist of a series of payments, the dates of which can be determined by the annuity start date and frequency. The probability that an annuitant will be living on a certain date can be calculated exactly, based on the mortality and interpolation methods of our actuarial model. The actuarial present value of each payment, then, is simply the product of: the probability of a payment being made, the amount of the payment, and the present value of a payment on that date. The actuarial present value of an annuity, then, is the sum of the actuarial values of each of its payments. ΓòÉΓòÉΓòÉ <hidden> Corporate Valuation Mode Help ΓòÉΓòÉΓòÉ Actuarial Modeler for OS/2 Warp has just been put into Corporate Pension Plan Valuation Mode. This mode is not functional yet, but shows the outline of a program that could be developed for performing valuations and projecting cash flows of company pension plans. Such a program would be useful addressing a number of pension funding questions: How would funding and cash flows be affected by changes in actuarial assumptions or experience in such key areas as interest, turnover, salary inflation, pension indexation, etc? What are the cost implications of various alternative benefit changes or improvements that are being negotiated? What are the levels of liabilities and costs associated with various alternative funding arrangements? What are the levels of funding and the accrued benefit liabilities for various groups or categories of employees, and how might these be changed, for example, in the event of an early retirement incentive program? What are the durations and levels of payments expected for a group of active and deferred vested retirees? This sort of information would be useful in deciding the durations of investments that are to provide their payments. What are the costs associated with various methods of providing indexing to pensions? For example, what sort of savings could be realized from indexing benefits every two or three years instead of annually. With present computer capabilities, it is now feasible for such questions to be calculated in a desktop program with results available within minutes. If sufficient interest is shown, Robert Bland & Associates proposes to develop such a program over a period of one to one and a half years with the participation of 6 - 10 developing partners to provide input on the various types of information to be developed for users, and the types of reports produced. Developing partners would have an advantage that their plans, terms, and valuation methods would be specifically included in capabilities of the program that is developed. Should your company or organization be interested in participating in the development of a such a comprehensive valuation tool, please contact: Robert Bland & Associates Internet E-Mail: rbland@ibm.net 74 Bonacres Ave. Telephone: (416) 284-7359 Scarborough, Ontario, Canada M1C 3B9 ΓòÉΓòÉΓòÉ 4. Corporate Pension Valuation Program ΓòÉΓòÉΓòÉ An outline is presented for program that could be developed for performing valuations and projecting cash flows of company pension plans. Such a program would be useful addressing a number of pension funding questions: How would funding and cash flows be affected by changes in actuarial assumptions or experience in such key areas as interest, turnover, salary inflation, pension indexation, etc? What are the cost implications of various alternative benefit changes or improvements that are being negotiated? What are the levels of liabilities and costs associated with various alternative funding arrangements? What are the levels of funding and the accrued benefit liabilities for various groups or categories of employees, and how might these be changed, for example, in the event of an early retirement incentive program? What are the durations and levels of payments expected for a group of active and deferred vested retirees? This sort of information would be useful in deciding the durations of investments that are to provide their payments. What are the costs associated with various methods of providing indexing to pensions? For example, what sort of savings could be realized from indexing benefits every two or three years instead of annually. With present computer capabilities, it is now feasible for such questions to be calculated in a desktop program with results available within minutes. If sufficient interest is shown, Robert Bland & Associates proposes to develop such a program over a period of one to one and a half years with the participation of 6 - 10 developing partners to provide input on the various types of information to be developed for users, and the types of reports produced. Developing partners would have an advantage that their plans, terms, and valuation methods would be specifically included in capabilities of the program that is developed. Should your company or organization be interested in participating in the development of a such a comprehensive valuation tool, please contact: Robert Bland & Associates Internet E-Mail: rbland@ibm.net 74 Bonacres Ave. Telephone: (416) 284-7359 Scarborough, Ontario, Canada M1C 3B9 ΓòÉΓòÉΓòÉ 5. Robert Bland & Associates Information ΓòÉΓòÉΓòÉ Robert Bland & Associates, or Robert Bland if you will, has been involved in the valuation of employee pension plans and benefits in Canada for the last 20 years, and has completed the Associateship level of examinations given by The Society of Actuaries. Among past achievements are the initial design and creation of CANNEX - The Canadian Annuity Exchange, an on-line service comparing annuity rates of insurers across Canada, as well as the complete design, creation, and implementation of the software package Prediktor/4, an MS-DOS based, open-group cash flow projection and valuation program for employer pension plans. ΓòÉΓòÉΓòÉ <hidden> ΓòÉΓòÉΓòÉ Open Connections refer to entries in CONNECT.LOG that show a connection being made to your Internet Provider without any matching entries for the session being disconnected. Open Connections are usually caused by disconnecting the modem without properly selecting the Hang Up button of the Internet Dialer.