The Benefit Payment Set Provision - Late Retirement screen allows users to define how benefits are to be calculated when a participant elects to receive a benefit after Normal Retirement Date.

• Apply actuarial increases to benefits for participants working past NRD: check this box if benefits payable after Normal Retirement Date are something other than the plan's accrued benefit.
• Late Retirement Increase Eligibility Formula: space to narrow the group of participants that are eligible for benefits defined on this page. Leave this formula blank if all participants are eligible for the benefits defined on this page.
• Calculate increase factor using: indicate the method to use when determining the actuarial increase factor by choosing from the following options:
  
  
  • Mortality and interest: recognizes both interest and mortality during both the accumulation and deferral periods. Specifically, the accumulation factor is developed as follows: (a_start⁽¹²⁾ / a_end⁽¹²⁾) * (1 + i)^(end - start) * (l_start / l_end)
    
    a_start⁽¹²⁾: annuity factor due at start of accumulation period
    a_end⁽¹²⁾: annuity factor due at end of accumulation period
    i: annual rate of return
    l_start: number of cohort lives at start of period.
    l_end: number of cohort lives at end of period.
    
  • Interest only: accumulates benefit at some rate. For example if the interest rate were 8% and the benefit was to be accumulated for 1 year, the benefit amount would be increased by 8%.
  • Mortality, but interest only during accum period: accumulates benefit with mortality but only using interest during the accumulation period. Specifically, the accumulation factor is developed as follows: (a_start⁽¹²⁾ / a_end⁽¹²⁾) * (1 + i)^(end - start)
    
    a_start⁽¹²⁾: annuity factor due at start of accumulation period
    a_end⁽¹²⁾: annuity factor due at end of accumulation period
    i: annual rate of return
    
  • Ratios of N_x: accumulates amounts by multiplying by the commutation function N_x at payment start date divided by N_x at payment end date.
  • Interpolated Inter-age Increase Factors: develops increase factors at integer ages and then interpolates those factors for non-integer ages.
• Increase based upon following Annuity Factor Definition: choose the annuity factor to use for accumulating benefits. The payment form here generally corresponds to the single normal form of the pension plan.
• Measure increase using actuarial provisions at: the following options are available. This only applies when the actuarial basis uses floating interest and/or mortality.
  
  
  • Start of period: choose this option when the actuarial accumulation from one date to the next is based upon the actuarial basis at the beginning of the period.
  • End of period: choose this option when the actuarial accumulation from one date to the next is based upon the actuarial basis at the end of the period.
  • Normal Retirement Date: choose this option when the actuarial accumulation from one date to the next is based upon the actuarial basis at Normal Retirement Date.
  • Annuity Commencement Date: choose this option when the actuarial accumulation from one date to the next is based upon the actuarial basis at Annuity Commencement Date.
• Adjust increase factor by the following: if increases are to be further adjusted by some Formula Derived Item, choose the item here.
• Adjust late row amounts by the following: if late row amounts are to be further adjusted by some Formula Derived Item, choose the item here.
• Override each increase factor by the following: increase factors may be overridden by some Formula Derived Item using this dropdown.
• Multiply final benefit by: if the final late benefit is derived by multiplying the benefit by some Formula Derived Item, choose the item here
• Rounding of Increase Factor: area to indicate how the increase factor is to be rounded (if any rounding applies).
• Measure increase factors at regular intervals prior to actual retirement: use this area to define the different points in time that actuarial increases are to be applied. The following options are available:
• Develop accumulation periods at fixed dates: select this option if benefits are to be increased at fixed dates (every January 1 for example).
• Develop accumulation periods on anniversary retirement dates: choose this option if benefits are accumulated on the anniversary of Normal Retirement Date. For example, if a person's Normal Retirement Date is June 1, actuarial increases are applied once per year every June 1 until the person retires.
• Accumulation periods start at beginning of each Plan Year: select this option if benefit accumulate at the start of each plan year.
• Benefit may not be less than the accrued benefit at each interval: check this box if the accrued benefit serves as a minimum amount at each actuarial increase interval.
• Separately actuarially increase each accrual unit to actual retirement date: check this box if the benefit at Normal Retirement Date and then each accrual unit are separately accumulated to actual retirement date (rather than being rolled forward in total).
• Separately actuarially increase each accrual unit to actual retirement date beginning April 1 following age 70 1/2: same as option above except that actuarial increases do not begin until a person's April 1 following age 70 1/2 (Minimum Required Distribution Date).
• Do not actuarially increase benefits prior to calculation/termination date: check this box if actuarial increases do not apply until after a participant has terminated employment.
• Do not actuarially increase benefits prior to calculation/termination date if calculating prior to Date Age 70 1/2: check this box if actuarial increases do not apply until after a participant has terminated employment, given that the calculation date is before the participant reaches age 70 1/2.
• Do not actuarially increase benefits prior to Date Age 70 1/2: check this box if no actuarial increases should be applied prior to the Minimum Required Distribution Date.
• Do not actuarially increase benefits prior to Date Age 70 1/2 after SOB notice issued: checking this box will result in no actuarial increases following the date that a suspension of benefits notice is issued. However, once a participant reaches the Minimum Required Distribution Date, accruals will begin regardless of whether or not a suspension of benefits notice was provided to the participant.
• Apply actuarial increases to lump sum rather than single normal form of benefit: check this box if actuarial increases are applied to lump sum amounts rather than the single normal form (usually only applicable for cash balance plans).
• Separately apply actuarial increases to different benefit components: check this box if different pieces of benefits use different increase methods.
• Provide option to take accumulated prior payments rather than actuarially increase: this option is typically used to calculate accumulated retroactive payments. Press the Details button to view the Benefit Payment Set Provision - Late Retirement - Late Accumulation screen.
• Advanced Button: press this button to view the Benefit Payment Set Provision - Late Retirement - Advanced screen.