Actuarial Equivalence Definitions are used to specify the combination of mortality and interest rate. They are needed for any annuity factor or conversion factor calculated using the add-in. While DBPXL comes pre-loaded with a sample Actuarial Equivalence Definition for reference, you will need to add new definitions.

• View/Edit:  to view or edit an existing Actuarial Equivalence Definition, double-click the corresponding item within the list.
• Add:  to add a new Actuarial Equivalence Definition, press the Add button
• Delete:  to delete an existing Actuarial Equivalence Definition, select the corresponding item and press the Delete button
• Copy/Paste:  to copy an existing Actuarial Equivalence Definition to another definition, select the source item, and press the Copy button. Then select the target item and press Paste. Note that this will copy all parameters except for the definition name.

Once you double-click on an item in the list described above, you will be brought to the Actuarial Equivalence Detail screen which allows you to view details of the selected definition:

• Definition Name:  this is the name of the Actuarial Equivalence Definition. It may not contain any spaces or match the name of another definition.


• Mortality Base Table: select the base mortality table from the drop down box. The list displays all mortality tables that have been set up. If your table is not on the list, you must first create it using the Mortality Tables button on the main menu.
  
  For sex-distinct tables, you must indicate whether male or female mortality probabilities should be used by checking the Male or Female check box, respectively.
  
  Check the box labeled "Alternate pre-payment mortality" to indicate if there should be different mortality provisions prior to payment.
  
  When selecting the option [Floating IRC - 417(e)(3)], if the calculation year is prior to 2008, the DBPXL will use the latest published table. To get rates on a 417(e)(3) basis for calculation years prior to 2008, you will need to create your own Actuarial Equivalence basis that uses one of the prior mortality tables (1983GAM_5050 or 1994GAR_2002 for example).
• Age Setback/Setforward: complete these boxes if an age setback or setforward should be applied to the Base Table. Enter the years and months of adjustment in the Years and Months boxes, respectively. Age setbacks are indicated with positive numbers and age setforwards should be indicated with negative numbers.
• Mortality Projection Table: select the specific projection table from the drop down box. The list displays all projection tables that have been set up in the system. If you don't see the needed table, you must first create it via the Mortality Tables button on the main menu.
  
  Select "(none)" from the drop down box if you do not wish to project mortality.
• Mortality Projection Type: use these boxes to indicate the time period to project mortality. Select one of the following options from the Projection Type drop down box:
  • Calculation year: select if you wish to project the table dynamically to each calculation year.
  • Fixed year: select to project the table to a fixed year (e.g., 2025). In this case, you must also enter the year in the Projection Year box.
  • Generational: select to project using generational mortality.
• Blend Fraction: specify the ratio of mortality to use for opposite gender mortality. For example, for male mortality, to use 80% male and 20% female mortality, enter 0.2 here. 0 is the default value for these inputs.

Interest rates can be specified here to define the defaults for calculating different values. However, these can easily be overriden when writing formulas in Excel so are not required.

• Interest Rate Type: area to indicate whether the interest rate used in this definition of actuarial equivalence is a fixed rate that never changes over time or whether the rate is variable and fluctuates based upon some index or published rate. Choose either of the following:
  • Fixed Rate: select if the interest rate to be used never changes. Enter the fixed rate in the box provided as a decimal. For example, 6% would be indicated entered as 0.06.
  • Variable Rate: select if the interest rate to be used will fluctuate over time based upon some published rate. Choose the specific variable index to be used from the drop down box.
• Variable Interest Rates Levels by Age: select the type of variable rate. Choose from Same for All Ages, PBGC Style Rates, or PPA Segment Rates. For the latter, you can check Reflect rate transition rules if applicable.
• Rate Determination Reset Frequency: indicate the frequency upon which the interest rate is reset. Choose from the following options: Annually, Semi-annually, Quarterly, or Monthly.
• Rate Determination Lookback: indicate how many months of lookback should be used to determine the variable rate for the period. The system selects the rate for the month that is the indicated number of lookback months prior to the beginning of the particular rate reset period.
• Rate Determination Calendar Anniversary: this is used in combination with the Rate Reset Frequency to define the specific period a variable rate applies and when the interest rate is reset. Enter the Month and Day of the anniversary year that starts the reset frequency.
• Flat Adjustment: enter any fixed adjustment to be applied to the interest rate determined using the parameters above. For example, if you always wish to add a flat 1% to the variable rate when determining actuarial equivalence, enter a flat adjustment of .01 here.
• Ratio Adjustment: enter any ratio adjustment to be applied to the interest rate determined using the parameters above. For example, some plans define the interest rate for actuarial equivalence as 120% of the PBGC rate. In this case, you would enter 1.2 here.
• Rounding of Resulting Rate: use the Rounding Type and Rounding Unit fields to indicate how to round the rate selected based on the parameters above.
• Blend rates with prior months prior to lookback: check this box if you wish to blend the lookback rates with another set of rates from a certain number of months prior to the lookback. Enter the number of months the additional sets of rates precede the lookback rates in the box provided (Number of Months).