Pension Discount Rate History

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Brief History of Pension Discount Rates

(7 days ago) 2 V207 Introduction We will discuss the discount used for Pension Benefit Guarantee Program (PBCG) adequacy levels, not FASB standards used in GAAP History of discount rates used in pension liabilities Advantages/disadvantage to the various discount rates Broadly, the material is based on the Center on Federal Financial Institution’s (COFFI) “PBGC: A Yield

https://www.casact.org/sites/default/files/presentation/annual_2008_handouts_atwill.pdf

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Pension Discount Yield Curve And Index Rates In US …

(4 days ago) These changes are reflected in the Mercer Index Ratesdiscount rates for the four Mercer sample pension plans, as determined using the Mercer Yield Curve. For September 30, 2021, the increase was 16 basis points for the Retiree and Mature plans and 14 basis points for the Average and Young plans.

https://www.mercer.us/our-thinking/wealth/mercer-pension-discount-yield-curve-and-index-rates-in-us.html

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FTSE Pension Discount Curve SOA

(8 days ago) The additional rates are calculated using the same discount curve and methodology as the standard rates but with shorter liabilities (As of January 2017, the Weighted Average Lives, or “WALs,” were 21.9 years and 16.8 years compared to the standard rate's WAL of 26.9 years.) We present the FTSE Pension Discount Curve for September 2021

https://www.soa.org/sections/retirement/ftse-pension-discount-curve/

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Interest Rates & Factors Pension Benefit Guaranty

(4 days ago) Historical ERISA 4022 Lump Sum Interest Rates. Find interest rates that PBGC used to determine lump sums prior to 2021. ERISA 4044 Immediate and Deferred Annuities. ERISA 4044 Annuities. Find current and historical select and ultimate interest rates for valuing benefits in terminating single-employer plans and certain multiemployer plans.

https://www.pbgc.gov/prac/interest

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What is a Discount Rate and Why Does It Matter? - NPPC

(Just Now) A discount rate is a term in economics related to the present value of future payments, in this case, pension benefits. The present value of a pension benefit is how much it is worth today. If the worker contributes $100 and the employer contributes $100, then the present value of the pension benefit, as of today, is $200.

https://protectpensions.org/2016/04/19/discount-rate-matter/

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Discount Rates and DB Pension Scheme Valuation: A …

(6 days ago) In a historical setting, it is obviously a risk-experienced rate, the average of previously prevailing rates; this extrapolates to the use of discount rates in a prospective setting, which renders much of the risk-management literature on DB pensions otiose. There are many desiderata of measures, often situation specific.

https://henrytapper.com/2018/09/27/discount-rates-and-db-pension-scheme-valuation-a-history-lesson-from-con-keating/

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Discount Rate Sensitivities in Pension Plans

(3 days ago) Since the most common going concern discount rate in January 1, 2015, valuations was 5.75%, the sensitivity data available have been used to determine the duration of each pension plan at a discount rate of 5.25%. This is comparable to the effect of a 1% decrease in the discount rate from 5.75% to 4.75%.

https://www.soa.org/globalassets/assets/Files/Research/Projects/discount-rate-sensitivity.pdf

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Minimum Present Value Segment Rates Internal …

(2 days ago) Minimum Present Value Segment Rates. Generally for plan years beginning after December 31, 2007, the applicable interest rates under Section 417 (e) (3) (D) of the Code are segment rates computed without regard to a 24 month average. For plan years beginning in 2008 through 2011, the applicable interest rate is the monthly spot segment rate

https://www.irs.gov/retirement-plans/minimum-present-value-segment-rates

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Fundamentals of pension accounting and funding

(4 days ago) external interest rates as of that date. The selected discount rate is used to disclose the benefit obligations as of that 12/31 and then used to determine the pension expense for the next fiscal year. The discount rate does not change until the next 12/31 unless a significant event occurs requiring a remeasurement of the benefit obligations.

https://www.actuary.org/sites/default/files/files/publications/fundamentals_0704.pdf

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Interest Rates, Discount Rate for United States

(8 days ago) Graph and download economic data for Interest Rates, Discount Rate for United States (INTDSRUSM193N) from Jan 1950 to Aug 2021 …

https://fred.stlouisfed.org/series/INTDSRUSM193N

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Historical ERISA 4022 Lump Sum Interest Rates Pension

(8 days ago) Historical ERISA 4022 Lump Sum Interest Rates. PBGC's benefit payment regulation (CFR Part 4022) provides that when PBGC trustees a plan, if the value of a participant's benefit is less than $5,000, PBGC will generally pay that amount in one lump sum in lieu of a monthly annuity. Prior to 2021, PBGC used an immediate and deferred interest rate

https://www.pbgc.gov/prac/interest/vls

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What Is A Correct Discount Rate In Pension Calculations

(5 days ago) Low-interest rates play a critical role in calculating pension plan obligations. Specifically, the interest rates on high-quality corporate bonds are used to determine the plan’s expected risk-free return in the future – a metric known as the “discount rate”. If the discount rate decreases, a pension plan needs more assets today in

https://annualreporting.info/what-is-a-correct-discount-rate-in-pension-calculations/

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Setting the Record Straight - Pension Fact Sheet

(5 days ago) Is the discount rate the most important factor in determining the size of a government’s pension liability? The guidance put forth in the new Statements pertaining to the selection of a discount rate is certainly an important element but it is only one part of the determination.

https://www.gasb.org/cs/ContentServer?cid=1176160432178&d=&pagename=GASB%2FPage%2FGASBSectionPage

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Historical Lows for DB Plan Discount Rates Russell

(1 days ago) Funding and Accounting Discount Rates. Source: IRS, FTSE Pension Discount Curve. This chart makes clear the stark difference in predictability of the smoothed versus marked-to-market rates since 2012, but it also illustrates the …

https://russellinvestments.com/us/blog/db-plan-discount-rates

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Recent Interest Rate Notices Internal Revenue Service

(5 days ago) Provides the MAP-21 interest rates for plan years beginning in 2013 (and the historical rates used to calculate the MAP-21 rate). Notice 2013-6, 2013-10, I.R.B 540.

https://www.irs.gov/retirement-plans/recent-interest-rate-notices

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Discount Rates For Social Security Or Pension Decisions

(Just Now) Alternatively, this means that if Charlie calculates the present value of the pension payments at his 7% discount rate, its value will be less than the pension lump sum (implying the lump sum is a “good deal” to take)… until/unless Charlie lives into his late 90s, and then suddenly the pension itself turns out to be the better deal after all!

https://www.kitces.com/blog/net-present-value-discount-rate-formula-retirement-plan-pension-lump-sum-or-social-security-breakeven/

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Historical IRS Discount Rate PG Calc

(9 days ago) Table of Discount Rates. Prior to May 1989, the discount rate was fixed at 10%. The tables below contain the historic rates of the month starting in January 1989. These rates are programmed into our PGM Anywhere, Planned Giving Manager, and Gift Annuity Manager software up through the month of the current version's release.

https://www.pgcalc.com/service/historical-irs-discount-rate

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ExxonMobil Discount Rates: Your Pension Benefit

(5 days ago) For the “grandfathered” individuals, we know that the discount factor for the 4th quarter of 2020 will be 1.25% based on the past performance of the 30-year Treasury rates, which is a new record low. For those looking to retire and take advantage of fourth-quarter 2020 interest rates, the earliest your Benefit Commencement Date (BCD) can be is October 1, 2020, and no later …

https://bogartwealth.com/planning-your-benefit-commencement-date/

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Discount Rate Frequently Asked Questions - CalPERS

(9 days ago) What is the discount rate? The discount rate is the long-term interest rate used to fund future pension benefits. It is one of the key components of the Asset Liability Management (ALM) (PDF) cycle that CalPERS uses to balance assets with future pension obligations. The discount rate is also known as the assumed rate of return because it's what CalPERS expects its investments …

https://www.calpers.ca.gov/page/about/organization/facts-at-a-glance/discount-rate-frequently-asked-questions

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Actuaries and Discount Rates

(Just Now) Section Page 1 Overview of principal findings 1 2 Introduction and scope 12 3 Historical development of thinking on discount rates 13 4 Concepts associated with discounting 22 5 Characteristics and risk structure of discount rates 36 6 Summary of existing practices: Life Assurance 41 7 Summary of existing practices: General Insurance 51 8 Summary of existing …

https://www.actuaries.org.uk/system/files/documents/pdf/discountrateswebsitereportruth.pdf

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Pension Discount Rate History - Best Coupon Codes

(4 days ago) The discount rate at year-end 2020 was the lowest year-end discount rate and second lowest monthly discount overall that has been recorded in the 20-year history of the Milliman 100 Pension Funding Index (PFI).

https://www.mybestcouponcodes.com/pension-discount-rate-history/

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Pensions Accounting: Spot the discount rate Features IPE

(9 days ago) “The correct discount for the active member might be 4%, while for the pensioner it is 3%. That is because yield curves typically have an upward slope – the longer a benefit is paid for, the higher the discount rate appropriate for that benefit. Over the last couple of years, UK discount rates have averaged between 3.5% and 4%.

https://www.ipe.com/pensions-accounting-spot-the-discount-rate/10011285.article

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Con Keating: Discount rates and DB pension scheme

(9 days ago) In a historical setting, it is obviously a risk-experienced rate, the average of previously prevailing rates; this extrapolates to the use of discount rates in a prospective setting, which renders much of the risk-management literature on DB pensions otiose. There are many desiderata of measures, often context specific.

https://www.professionalpensions.com/opinion/3063527/-keating-discount-rates-db-pension-scheme-valuation-history-lesson

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Explaining the Discount Rate - Local Authorities Pension Plan

(3 days ago) The discount rate is the rate we use to value the current cost of future pension obligations. The discount rate is determined by estimating expected rates of return, from LAPP investments over the long term, and it includes a cushion for adverse deviation, known as margin. A key indicator of future returns is the yield on government long bonds

https://www.lapp.ca/page/explaining-the-discount-rate

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Commentary: A note on the discount rate Pensions

(Just Now) In current practice, the risk-free rate is generally a 10-year Treasury bond (about 1.6%). Corporate pension plans are required to use a discount rate equivalent to an AA-rated bond (about 2.6%

https://www.pionline.com/industry-voices/commentary-note-discount-rate

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Mercer Discount rate for IFRS/US-GAAP/HGB valuations

(5 days ago) The discount rates used for a typical pension plan at December 31, 2015, would typically increase by around 0.42%-points, to 4.31% up from 3.89%. Under German-GAAP, changes in pension liabilities from one year to the next are recognized immediately in profit and loss (P&L), so the change likely will benefit companies by smoothing P&L charges.

https://www.mercer.de/our-thinking/discount-rate-for-ifrs-us-gaap-hgb-valuations.html

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Discount Rate - Ontario Teachers' Pension Plan

(6 days ago) Plan History; Discount Rate. The discount rate plays a key role in assessing whether the pension plan has enough assets to meet its future pension obligations. The discount rate reflects what the plan's assets can reasonably be expected to earn over the long term. From this are subtracted the cost of running the pension plan and provisions for

https://www.otpp.com/corporate/plan-funding/funding-valuations/discount-rate

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Current GATT and PBGC rates for pension calculation.

(3 days ago) *Note regarding ERISA 4022 immediate and deferred lump sum interest rates - On September 9, 2020, PBGC issued a final rule providing that, starting in 2021 PBGC will use rates published by IRS [i.e., the IRC 417(e)(3) rates] to determine lump sum amounts for plans terminating after 2020. Because of that change, the December 2020 immediate and deferred rates shown in …

https://www.salinestahl.com/rates

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Pension Financial Impact of Record Low Treasury Bond Rates

(7 days ago) Pension Financial Impact of Record Low Treasury Bond Rates. How will defined benefit pension plans fare as a result of the 30-year U.S. Treasury bond rates falling below 2.00% for the first time in U.S. history?

https://findley.com/2019/08/pension-financial-impact-of-record-low-treasury-bond-rates/

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Yield Book: Indexes - FTSE Pension Liability Index

(4 days ago) The FTSE Pension Liability Index reflects the discount rate that can be used to value liabilities for GAAP reporting purposes. Created in 1994, it is a trusted source for plan sponsors and actuaries to value defined-benefit pension liabilities in compliance with the SEC's and FASB's requirements on the establishment of a discount rate.

https://www.yieldbook.com/m/indices/citi-pension-liability.shtml

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Falling Discount Rates Send Corporate Pension Funding

(1 days ago) It was also the first time the Milliman 100 PFI had reported a discount rate below 3.00%. “Discount rates have fallen by 110 basis points over the past 12 months, slashing corporate pension funding and hitting an all-time low for the PFI,” Zorast Wadia, co-author of the Milliman 100 PFI, said in a statement.

https://www.ai-cio.com/news/falling-discount-rates-send-corporate-pension-funding-tumbling/

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US Pension Buyout Index Mercer

(7 days ago) Commentary on the Mercer US pension buyout index results for Q2 2021. The hypothetical cost of purchasing annuities from an insurer was 99.5% of the buyout index accounting liability, while the economic cost of maintaining the plan was 105.2% of …

https://www.mercer.us/our-thinking/wealth/mercer-us-pension-buyout-index.html

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Pension Funding Index January 2021 - Milliman

(Just Now) The Milliman 100 discount rates fell 74 basis points to 2.46% at the end of 2020 from 3.20% at the end of 2019. The discount rate at year-end 2020 was the lowest year-end discount rate and second lowest monthly discount overall that has been recorded in the 20-year history of the Milliman 100 Pension Funding Index (PFI).

https://www.milliman.com/en/insight/Pension-Funding-Index-January-2021

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Pension Funding Index July 2021

(6 days ago) Over the last 12 months (July 2020 – June 2021), the cumulative asset return for these pensions has been 15.3% and the Milliman 100 PFI funded status deficit has improved by $246 billion. Discount rates have shown a small net increase over the last twelve months of just nine basis points. The funded ratio of the Milliman 100 companies has

https://us.milliman.com/en/insight/pension-funding-index-july-2021

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Old Benefits - My Pension

(8 days ago) What is the Old Benefits section? Old Benefits is closed to new members. It is a defined benefit pension arrangement under which benefits build up at the rate of 1/60th of your final pensionable

https://www.bbc.com/mypension/current-members/old-benefits

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Danger Zone: Pension Accounting – Discount Rates - New

(6 days ago) The increase in the discount rate for its Mexican pension plan (up 130 basis points from 8.1% in 2015) enables LBY to reduce its reported pension underfunding from $105 million in 2015 to $95 million in 2017. This rising discount rate has also helped mask the extent of the decline in LBY’s profitability.

https://www.newconstructs.com/danger-zone-pension-accounting-discount-rates/

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Rates Calpensions

(7 days ago) Posts about Rates written by Ed Mendel. A new CalPERS report shows average local government police and firefighter pension costs have reached 50 percent of pay — a level former CalPERS chief actuary Ron Seeling warned a decade ago would be in his view “unsustainable.”. The number of police and firefighter or “safety” plans with an annual cost of 70 percent of pay …

https://calpensions.com/category/calpers/rates/

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Philippines Interest Rate 2021 Data 2022 Forecast

(4 days ago) Interest Rate in Philippines averaged 7.55 percent from 1985 until 2021, reaching an all time high of 31 percent in January of 1985 and a record low of 2 percent in November of 2020. This page provides the latest reported value for - Philippines Interest Rate - plus previous releases, historical high and low, short-term forecast and long-term

https://tradingeconomics.com/philippines/interest-rate

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Review of Methodologies to Determine Discount Rates

(Just Now) Consistent with PS 3250, the government continues to use the expected rate of return on plan assets as its discount rate for the funded pension plans, without any changes: This rate reflects the view that, when plan assets have been segregated and legally restricted for funding future benefit payments, the economic burden of the entity is the

https://www.canada.ca/en/treasury-board-secretariat/corporate/reports/review-methodologies-determine-discount-rates.html

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Tennessee Consolidated Retirement System

(6 days ago) Net Pension Liability (Asset) including discount rate sensitivity and reconciliation between years Fiduciary Net Position is the amount of assets available for benefits in the Pension Plan. Total Pension Liability is the plan liability determined using assumptions listed in the Summary of Actuarial Assumptions.

https://publicreports.treasury.tn.gov/GASB68_PDFs/2018-GASB%2067%20Report%20Legacy.pdf

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Calculating Commuted Values

(3 days ago) This “commuted value” (CV) is the present value of the expected monthly lifetime retirement pension that they would have received from the plan. The method for calculating CVs is prescribed by pension legislation, using the CIA’s actuarial Standards of Practice published by the Actuarial Standards Board. Section 3500 of the Standards of

https://www.cia-ica.ca/publications/calculating-commuted-values

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Pension scheme valuations Corporate guide

(4 days ago) Pension scheme valuations Corporate guide. UK Defined Benefit (“DB”) pension schemes are often a key financial risk for their sponsors and, depending on the risk profile of the At March 2014, the trustees of a £200m scheme set a single overall discount rate to be 4.9% p.a. This was equivalent to gilt yields plus 1.25% p.a. The 1.25%

https://www2.deloitte.com/content/dam/Deloitte/uk/Documents/consultancy/deloitte-uk-pension-scheme-valuations-corp-guide.pdf

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