What is a life expectancy appraisal?
This approach is based upon the use of Life Expectancy Tables. Present Value is determined as follows: (Six Step Process)
(1.) Calculate the amount of the monthly pension benefit if it were assumed that the Pension Holder was at retirement age with a fully vested pension based upon compensation and plan provisions as of the Date the Marriage Ended.
(2.) The Pension Holders life expectancy as of the Date the Marriage Ended is subtracted from the normal retirement age to determine the expected number of months of pension benefits.
(3.) An appropriate interest rate is used to determine the present value of the monthly benefit as of the Date of Valuation.
(4.) The present value is then discounted for mortality and disability (if applicable).
(5.) The present value is reduced if the plan has not vested.
(6.) If a portion of the pension was earned outside the marriage, a coverture fraction is applied.