Actuarial Assumptions on Contingent Output Rates under Multidecrements
Evaristo Diz Cruz
Jeffrey T. Query
In the actuarial valuation of "severance-type" defined benefit plans where a fraction of the total benefit is recognized, due to death, resignation or dismissal, in addition to retirement, it is very important to define the models of the underlying rates of the experience of the company, on the issue of payment for resignations and dismissals. The demography in terms of the distribution of personnel by age, assuming different models, negative exponential, linear and constant, is indicative of the actuarial cost and Liabilities. A higher or lower cost will depend on the model used and the distribution of the company's personnel by age. The latter, although evident, can be complicated in terms of the Assumptions and Hypotheses that are used.