Actuarial Adjustment

Actuarial Adjustment

In insurance and pensions, a change made to a company's premiums, reserves, or finances based on actual or expected changes to the benefits it must pay out. For example, if a disproportionate number of pensioners retire early, the company providing their pensions must adjust its reserves downward and/or its premiums upward to account for the benefits it must pay before it expected to do so. A company may also make actuarial adjustments to benefits themselves; for example, those persons retiring early may find their monthly pension payments are less than expected.
References in periodicals archive ?
Social Security benefits increase by about 8% a year between ages 62 and 70, due to the actuarial adjustment before the full retirement age of 66 and the delayed retirement credit between 66 and 70.
As individuals who claim later can, on average, expect to receive benefits for a shorter period, an actuarial adjustment is made to the monthly benefit to reflect the age at which benefits are claimed.
Canada Pension Plan Actuarial Adjustment Factors Study, Actuarial Study No.
45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, presumed that it would be impractical for employers to obtain the actual amount of the actuarial adjustment.
Our measure is the risk premium for the specific subscriber because the actuarial adjustment is specific to the age and health of the subscriber.
6 million reduction of employee benefits expense in the prior-year quarter, which was due to an actuarial adjustment for health claims.
7 million after-tax favorable actuarial adjustment to self-insurance reserves due to a decline in workers' compensation claims and lower costs per claim.
Finally, Guillmette believes a proposal to increase the actuarial adjustment factor used to increase the retirement pensions of those who retire after 65 years of age would provide "a clear incentive to delay retirement.
It also permitted to pay an occupational pension before age 60 provided that there is an actuarial adjustment downwards in the pension.
Monks asserted that the appropriate remedy under ERISA was to elect between (1) his monthly benefit as it continued to accrue under the plan with the two additional years of service (with no actuarial adjustment to reflect the shorter life expectancy and payout period) and (2) the adjusted value of his monthly benefit computed as of his normal retirement date (ignoring the two additional years of service), actuarially adjusted to reflect that the expected payout period would be shorter (due to his shorter life expectancy).
In addition, the uniform actuarial adjustment for postponed benefits is likely to have a different impact on men and women, because women's longer life expectancy means that they stand to gain more from postponing benefits.
In our data set, option (4) is not observed (that is, there is never an actuarial adjustment and a service accrual).