Question

All of the following variables factor into a firm's Defined Benefit Program's Asset Liability Management, except?

		Interest rates.
		Participating employee expected retirement age.
		Participating employee turnover.
		Participating employee social security benefit.

Answer 1

Participating employee social security benefit - This does not factor because the social security benefit is irrelevant to the firm's Defined Benefit Program. The benefits to be paid by the firm are not affected by the employee's social security benefit in any way.

Interest rate, expected retirement age, and employee turnover factor into a firm's Defined Benefit Program's Asset Liability Management because the directly affect the value of liabilities, funded status and contributions to be made.