Interest Rate in Pension Plan Premium Calculation

Authors

  • Khafsah Joebaedi Department of Mathematics, Faculty of Mathematics and Natural Science, Universitas Padjadjaran, Bandung, Indonesia
  • Kankan Parmikanti Department of Mathematics, Faculty of Mathematics and Natural Science, Universitas Padjadjaran, Bandung, Indonesia
  • Agus Supriatna Department of Mathematics, Faculty of Mathematics and Natural Science, Universitas Padjadjaran, Bandung, Indonesia
  • Fauzi Akhmad Department of Mathematics, Faculty of Mathematics and Natural Science, Universitas Padjadjaran, Bandung, Indonesia
  • Badrulfalah Badrulfalah Department of Mathematics, Faculty of Mathematics and Natural Science, Universitas Padjadjaran, Bandung, Indonesia
  • Nendi Suhendi Syafei Department of Electrical Engineering, Faculty of Mathematics and Natural Science, Universitas Padjadjaran, Bandung1, Indonesia

DOI:

https://doi.org/10.24036/eksakta/vol21-iss1/218

Keywords:

interest rate, pension, premium, FSL, PVFSAL, premiums, benefits

Abstract

This research aims to analyze the relationship between the interest rate relationship is inversely proportional to the amount of the premium on the pension plan. The method used is to measure several variables, among others FSL (Future Service Liability), PVFSAL (Present Value Future Salary), PR (Pension Rate) and Premiums. Calculation, life annuity uses actuarial assumptions, one of which is the interest rate assumption, if the assumptions used are not in accordance with the actual conditions, then what happens is excessive payments or deficient payments. The interest rate has an influence in the process of calculating the defined benefit pension plan premium. Using the assumption of different interest rates (11%, 12 % and 13%), it is found that the interest rate relationship is inversely proportional to the amount of the premium. The results of this study are FSL, PVFSAL, PR and Premiums for the interest of 11%, 12% and 13% (participants aged 25 years) as follows 720,187.97; 554,000,24; 430,570.07 (FSL in Rupiah); 27,155,187.70; 24,922,770,59; 23,002,699.40 (PVFSAL in Rupiah); 2.6521; 2.2229; 1.8718 (PR in%) and 55,535.38; 46,546.85; 39,196.00 (Premiums in Rupiah)The higher the interest rate, the smaller the pension premium and vice versa.

Downloads

Download data is not yet available.

References

Blomquist NS, Wijkander H. Fertility waves, aggregate savings and the rate of interest. Journal of population economics. 1994;7(1):27-48.

Bourcier De Carbon P. [Fluctuations in relative income and the baby boom in the United States]. Population et avenir. 1997(635):2-6.

Brinner RE. U.S. outlook issues: putting America's house in order. Academic medicine : journal of the Association of American Medical Colleges. 1989;64(3):131-4.

Manns B, McKenzie SQ, Au F, Gignac PM, Geller LI, Canadians Seeking S, et al. The Financial Impact of Advanced Kidney Disease on Canada Pension Plan and Private Disability Insurance Costs. Canadian journal of kidney health and disease. 2017;4:2054358117703986.

Ediev DM. Why increasing longevity may favour a PAYG pension system over a funded system. Population studies. 2014;68(1):95-110.

Liu T, Flothmann EJ. [The new aging society: demographic transition and its effects on old-age insurance and care of the elderly in China]. Zeitschrift fur Gerontologie und Geriatrie. 2013;46(5):465-75.

Hungerford T, Rassette M, Iams H, Koenig M. Trends in the economic status of the elderly, 1976-2000. Social security bulletin. 2001;64(3):12-22.

Johansson PO. Properties of actuarially fair and pay-as-you-go health insurance schemes for the elderly. An OLG model approach. Journal of health economics. 2000;19(4):477-98.

Kolmar M. Intergenerational redistribution in a small open economy with endogenous fertility. Journal of population economics. 1997;10(3):335-56.

Mathisen K. [Pension taxation. New settlement does not ensure a real interest rate of 3.5]. Sygeplejersken. 1983;83(16):18-9.

Poole CJ. Retirement on grounds of ill health: cross sectional survey in six organisations in United Kingdom. Bmj. 1997;314(7085):929-32.

Prinz A. Endogenous fertility, altruistic behavior across generations, and social security systems. Journal of population economics. 1990;3(3):179-92.

Zimmermann M, Glaser-Moller N, Deck R, Raspe H. [Subjective need for rehabilitation, intention to apply and application for medical rehabilitation--results of a survey of federal insurance office]. Die Rehabilitation. 1999;38 Suppl 2:S122-7.

Larson, Robert. E. and Gaumnitz, Erwin. A. 1962. Life Insurance Mathematics. USA: John Willey & Sons, inc

Winklevoss, Howard.E. 1976. Pension Mathematics with Numerical Illustration. USA: Published by Pension Research Council and University of Pennsylvania Press.

Anderson, Arthur.W. 1985. Pension Mathematics for Actuaries. Massachusetts Published in Needhan: The Windsor Press Inc.

Downloads

Published

2020-04-30

Issue

Vol. 21 No. 1 (2020): Eksakta : Berkala Ilmiah Bidang MIPA (E-ISSN : 2549-7464)

Section

EKSAKTA: Berkala Ilmiah Bidang MIPA

License

Copyright (c) 2020 Khafsah Joebaedi, Kankan Parmikanti, Agus Supriatna, Fauzi Akhmad, Badrulfalah Badrulfalah, Nendi Suhendi Syafei

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

This is an open-access article distributed under the terms of the Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted non-commercial use, distribution and reproduction in any medium

How to Cite

1.
Interest Rate in Pension Plan Premium Calculation. EKSAKTA [Internet]. 2020 Apr. 30 [cited 2026 Aug. 10];21(1):40-5. Available from: https://eksakta.ppj.unp.ac.id/index.php/eksakta/article/view/218

Most read articles by the same author(s)

<< < 1 2