The actuarial cost method includes the asset valuation method used to determine the actuarial value of the assets of a pension plan.Īctuarial gain and loss means the effect on pension cost resulting from differences between actuarial assumptions and actual experience.Īctuarial valuation means the determination, as of a specified date, of the normal cost, actuarial accrued liability, actuarial value of the assets of a pension plan, and other relevant values for the pension plan.Īllocate means to assign an item of cost, or a group of items of cost, to one or more cost objectives.
The excess of the actuarial value of the assets of a pension plan over the actuarial accrued liability is an actuarial surplus and is treated as a negative unfunded actuarial liability.Īctuarial assumption means an estimate of future conditions affecting pension cost e.g., mortality rate, employee turnover, compensation levels, earnings on pension plan assets, and changes in values of pension plan assets.Īctuarial cost method means a technique which uses actuarial assumptions to measure the present value of future pension benefits and pension plan administrative expenses, and that assigns the cost of such benefits and expenses to cost accounting periods. The excess of the actuarial accrued liability over the actuarial value of the assets of a pension plan is the unfunded actuarial liability. As of such date, the actuarial accrued liability represents the excess of the present value of future benefits and administrative expenses over the present value of future normal costs for all plan participants and beneficiaries. Actual costs include standard costs properly adjusted for applicable variances.Īctuarial accrued liability means pension cost attributable, under the actuarial cost method in use, to years prior to the current period considered by a particular actuarial valuation. (This method is also known as the unit credit cost method without salary projection.).Īccumulating costs means collecting cost data in an organized manner, such as through a system of accounts.Īctual cash value means the cost of replacing damaged property with other property of like kind and quality in the physical condition of the property immediately before the damage.Īctual costs means (except for subpart 31.6) amounts determined on the basis of costs incurred, as distinguished from forecasted costs. The measure of the actuarial accrued liability at a plan’s inception date is the present value of the units of benefit credited to employees for service prior to that date. The measure of normal cost under this method for each cost accounting period is the present value of the units of benefit deemed to be credited to employees for service in that period. Accrued benefit cost method means an actuarial cost method under which units of benefits are assigned to each cost accounting period and are valued as they accrue i.e., based on the services performed by each employee in the period involved.
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