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IAI Actuarial Core Principles · Actuarial Mathematics for Modelling · Projecting and valuing cashflows contingent on multiple decrement events

A service table for Indian employees shows 2,000 active members at age 60. During the following year, 30 members die in service and 90 withdraw. Both decrements occur only within the year and there are no other exits. How many active members are expected at age 61?

The expected number of active members at age 61 is 1,880. Starting from 2,000 members, both the 30 deaths and the 90 withdrawals leave service, so total decrements of 120 are subtracted from the opening number.

  1. A1,970
  2. B1,910
  3. C1,880Correct
  4. D1,920
  5. 1,850

Explanation

The active members at the next age equal the starting number less all decrements: 2,000 − 30 − 90 = 1,880. Using only deaths gives 1,970, and using only withdrawals gives 1,910. Both are wrong because every decrement removes a member from service.

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