Individual Spread Gain Actuarial Cost Method

A method under which the actuarial present value of each increment of an individual’s projected benefits is allocated on a level basis over the future earnings or service of the individual between the age at which such increment is first recognized and the exit age(s). The portion of this actuarial present value allocated to a valuation year is called the normal cost. The actuarial value of assets is deemed to be assigned to individuals on a reasonable and consistent basis; for example, each individual’s share may be the accumulation of his or her prior normal costs and any prior actuarial gains (losses) allocated to the individual. Actuarial gains (losses) are allocated to individuals in proportion to the assigned actuarial value of assets, or on any other reasonable and consistent basis. The actuarial accrued liability for an individual equals the assigned portion of the actuarial value of assets. (ASOP No. 4)