A Conversion Factor Definition converts an initial payment form to another payment form. The factor is the value of the initial annuity divided by the value of the annuity after conversion.

• Initial annuity (factor numerator):
  • Choose: Applies a standard payment-form preset to the initial annuity inputs.
  • Fraction of Benefits Payable: Defines the portion of the initial benefit payable under each survival condition.
    • During the Certain Period: Portion payable during the guaranteed period.
    • While Only the Primary Annuitant is Alive: Portion payable while the primary annuitant survives and the beneficiary does not.
    • While only the Beneficiary is Alive: Portion payable while the beneficiary survives and the primary annuitant does not.
    • While Both are Alive: Portion payable while both the primary annuitant and beneficiary survive.
    • Use maximum fraction allowed under 1.401(a)(9)-6: Uses the applicable maximum beneficiary fraction permitted by the regulation.
  • Certain Period: Defines the guaranteed-payment period for the initial annuity.
    • Fixed: Uses the entered guaranteed-payment period in years. Enter 0 when there is no certain period.
    • Variable: Uses the selected Formula Derived Item to determine the guaranteed-payment period by participant.
    • Use maximum period allowed under 1.401(a)(9)-6: Limits the guaranteed period to the applicable regulatory maximum.
• Annuity after conversion (factor denominator):
  • Choose: Applies a standard payment-form preset to the annuity after conversion inputs.
  • Fraction of Benefits Payable: Defines the portion of the converted benefit payable under each survival condition.
    • During the Certain Period: Portion payable during the guaranteed period.
    • While Only the Primary Annuitant is Alive: Portion payable while the primary annuitant survives and the beneficiary does not.
    • While only the Beneficiary is Alive: Portion payable while the beneficiary survives and the primary annuitant does not.
    • While Both are Alive: Portion payable while both the primary annuitant and beneficiary survive.
    • Use maximum fraction allowed under 1.401(a)(9)-6: Uses the applicable maximum beneficiary fraction permitted by the regulation.
    • Include Pop-up Option: Reflects an increase in the primary annuitant's payment after the beneficiary's death.
  • Certain Period: Defines the guaranteed-payment period for the annuity after conversion.
    • Fixed: Uses the entered guaranteed-payment period in years. Enter 0 when there is no certain period.
    • Variable: Uses the selected Formula Derived Item to determine the guaranteed-payment period by participant.
    • Use maximum period allowed under 1.401(a)(9)-6: Limits the guaranteed period to the applicable regulatory maximum.
• Actuarial equivalence:
  • Actuarial Equivalence Definition: Supplies the mortality and interest assumptions used for both annuity values.
• Rounding of factor:
  • Round Type: Selects the rounding method applied to the conversion factor.
  • Round Unit: Sets the primary rounding unit.
  • Alternate Unit: Sets the alternate unit used by rounding methods that require one.
  • Round factors at integer ages prior to interpolating: Rounds integer-age factors before a noninteger-age conversion factor is interpolated.
• Advanced: Opens the Conversion Factor Advanced screen for age measurement, interpolation, payment timing, beneficiary assumptions, mortality handling, and cost of living adjustments.
• View item in QuickCalc: Makes the definition available in QuickCalc (Currently unavailable)