Displayed valuation totals combine the applicable active cost-method result with present values for participants whose benefits are already fixed or in payment. Separate assumption bases may also produce at-risk, vested, tax maximum, and PBGC values.
UC, PUC, and EAN attribution applies to active benefit components. Terminated vested, disabled, retired, and survivor benefits are valued from their applicable payment streams and added when the result is displayed for all participants.
When an employee contribution benefit is configured, DB Precision develops the present value of future employee contributions and the current employee contribution normal cost. The net employer normal cost for each cost method is the gross normal cost reduced by the normal cost of employee contributions.
| Funding (Accounting) | Development |
|---|---|
| Present Value of Future Benefits / PVFB | The present value of all expected future benefits under the valuation assumptions. |
| Unit Credit / Target Liability (Accrued Benefit Obligation) | A cost method that attributes the current accrued benefit to each year of completed service. |
| Projected Unit Credit (Projected Benefit Obligation) | A cost method that projects the ultimate benefit and attributes it to each year of completed service. |
| Entry Age Normal | A cost method that allocates projected benefits at a level rate over the participant’s earnings or service from entry age to expected exit. |
| At-Risk Liability | Calculates liabilities assuming participants who become eligible to retire within 10 years following the valuation year retire on their first eligibility date. Available for UC, PUC, Tax-Max, and PBGC results. |
| Vested Liability (Vested Benefit Obligation) | Values the vested portion of the accrued benefit using Unit Credit parameters. |
| Tax-Max | A valuation base used to determine the maximum tax-deductible contribution under IRC §404. |
| PBGC | A valuation base used to measure the present value of vested benefits under PBGC premium funding target assumptions. |