HORIZON-BASED SETTLEMENT OF DEFINED BENEFIT PENSION PLAN LIABILITIES

摘要

A computer-implemented method settles a partition of a set of liabilities of a defined benefit pension plan arising from projected benefit payments promised to all or a subset of plan participants including pension benefits and other post-retirement benefits. The method includes calculating by the computer system the set of pension liabilities including the required benefit payments for each future year in the lifetime horizon of each participant in the entire or subset of the membership roster of the defined benefit pension plan using projected values based on the plan's specific benefit provisions, where the projected benefit payments are based on one or more assumptions including mortality, morbidity or survivorship. The method also includes specifying a settlement horizon comprised of partitions of the projected future lifetimes of participants over the membership roster, and calculating by the computer system the projected benefit payments within the settlement horizon.

主权项

1. A computer-implemented method for settling a partition of a set of liabilities of a defined benefit pension plan arising from projected benefit payments promised to all or a subset of plan participants including pension benefits and other post-retirement benefits, the method being performed on a computer system having an output device, comprising:
(A) calculating by the computer system the set of pension liabilities including the required benefit payments for each future year in the lifetime horizon of each participant in the entire or subset of the membership roster of the defined benefit pension plan using projected values based on the plan's specific benefit provisions, where said projected benefit payments are based on one or more assumptions including mortality, morbidity or survivorship; (B) specifying a settlement horizon comprised of partitions of the projected future lifetimes of participants over the membership roster; (C) calculating by the computer system the projected benefit payments within the settlement horizon; (D) outputting by the computer system a representation of the projected benefit cash flows within the settlement horizon; (E) settling of the defined benefit pension plan liabilities within the settlement horizon by the purchase of one or more annuities from one or more eligible insurance companies or alternative annuity providers.