Text: The lag adjustment distributes the mortality incidence over five years (25 percent in each of the first two years, and 17 percent for each of the remaining years) and discounts mortality benefits over this period at a rate of three percent.
Entailment: The lag adjustment distributes the mortality incidence over five years and discounts mortality benefits at a rate of three percent.
Contradiction: No discount is necessary to account for mortality benefits at a forward rate.