B
barney
Member
Hi
One of the formulae for the Attained Age Actuarial Liability is the same as the formula for the Entry Age Actuarial Liability (i.e. the formula where you work out the present value of total expected benefits less present value of future expected contributions. So that says to me that the EAAL = AAAL.
Yet, later in the chapter it states that EAAL is greater than or equal to AAAL. And this fact is used in one or two exam questions.
How can EAAL be bigger than AAAL when the formulae are identical?
Thank you.
One of the formulae for the Attained Age Actuarial Liability is the same as the formula for the Entry Age Actuarial Liability (i.e. the formula where you work out the present value of total expected benefits less present value of future expected contributions. So that says to me that the EAAL = AAAL.
Yet, later in the chapter it states that EAAL is greater than or equal to AAAL. And this fact is used in one or two exam questions.
How can EAAL be bigger than AAAL when the formulae are identical?
Thank you.