In this special case, we might let
- 0 means Active
- 1 means Retired
- 2 means Disabled
- 3 means Death
- 4 means Termination
- 5 means Withdraw for Other Reasons
This model is relevant for certain retirement systems where benefit amounts vary by the
reason for leaving employment.
Source: 2003 Society of Actuaries Pension Plan Turnover Study, http://www.soa.org/
Figure 2: Aggregate Turnover Termination and Retirement. Termination estimated probabilities are smoothed via Whittaker-Henderson Type B whereas retirement estimatedprobabilities are unsmoothed. Estimated probabilities are in percent.
Figure 3: Aggregate Turnover Death, Disability and Other. All estimated probabilities are smoothed. The vertical scale indicates that probabilities of turnover from these sources are much smaller than retirement and termination. Estimated probabilities are in percent.
