Present Value of Future Benefits (PVFB)
Present Value of Future Benefits (PVFB) measures the present value of benefits expected to become payable under the selected valuation assumptions.
Active Participant PVFB
- B(b)x+t
- is the amount payable for benefit b at t years after the valuation date for a participant aged x.
- tp(τ)x
- is the probability that a participant aged x remains active for t years under all active decrements.
- q(d)x+t
- is the probability that the participant experiences decrement d at age x+t.
- vt
- is the discount factor from t years after the valuation date back to the valuation date.
- PF(b)x+t
- is the value of the applicable Benefit Payment Form for benefit b beginning at age x+t.
Inactive PVFB
- B(b)
- is the amount payable for the applicable inactive benefit b.
- PF(b)x
- is the value of the applicable Benefit Payment Form for benefit b for a participant aged x.
Payment Form
- I(b)u
- is the cumulative COLA increase factor developed for benefit b at duration u using the applicable COLA assumptions.
- up(b)x
- is the probability that a payment is due under the applicable Benefit Payment Form for benefit b at duration u.
- vu
- is the discount factor from duration u back to the valuation point at age x.
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