QUESTION: My client wants to convert an old final pay retirement plan into a cash balance plan as of 1/1/2017. The data contains all historical salaries, but does not contain the opening balance amount nor the accrued benefit at 12/31/2016. How can I compute the old benefit as of 12/31/2016 and convert it into an equivalent lump sum to become the opening balance of the cash balance plan. How can I code the new cash balance plan using the opening balance?

ANSWER: Our solution has two main parts:

• Use ProAdmin's operator #GETVALUE to extract from an accrual definition the final pay plan benefit at 12/31/2016.
• Combine two cash balance definitions in a subformula that results in the new cash balance. One will start with a zero balance beginning 1/1/2017 and include accruals (i.e.: employer contributions) and interest from 1/1/2017. The other cash balance definition will compute an accumulation factor that when multiplied with the opening balance produce the opening balance with interest credits.  

The following six Benefit Formula Components may already be setup or may need to be setup:

Name (for example)	BFC type	Basis Formula	Other Information
Old_Plan_Ben	Accrual definition	5 #FAS 10	Accrual rates are set up according
	- Final average		to old plan requirements.
ERF	Table	n/a	ERF is the early retirement (ER) factor. ERF > 0 for participants eligible for ER ERF = 0 for participants not eligible for ER.
CashBal_from_2017	Accrual definition	#SALARY *	Accrual rates are set up
	- Cash balance	#DATE > 12/31/2016	according to new plan requirements.
CashBal_Factor_for_OB	Accrual definition	#DATE = 12/31/2016	Set the accrual rate to 1 (one). In the
	- Cash balance		Accrued Benefit and Rounding topic select
			select "expected value" and unclick both rounding parameters.  Note that the basis formula for CashBal_Factor has a value of one (1) at the conversion date. This will allow ProAdmin to develop factors that are used with a opening balance amount to provide the opening amount with interest at future dates.
OB_factor_def	Annuity factor	n/a	Single life annuity deferred to NRD for participants not eligible for early retirement.
OB_factor_imm	Annuity factor	n/a	Single life annuity payable immediately for participants eligible for early retirement.

The final subformula collects results from the above components and builds the final cash balance values.

OldBen := 12/31/2016 #GETVALUE Old_Plan_Ben &	; Get the value of the old  ; final pay plan at conversion date.
OB_Factor := OB_Factor_def #MAX (OB_Factor_Imm * ERF)  &
OpenBal := OldBen * OB_Factor &	; determine the opening balance
OB_w_interest := OpenBal * CashBal_Factor_for_OB &	; determine the opening balance  ; with interest at each date
OB_w_interest + CashBal_from_2017	; cash balance at each date is the  ; opening balance with interest plus  ; the cash balance from conversion date