My mom is on her local city council, and I was looking at the reports for their (grossly underfunded) pension plans. Their interest rate assumption (6.25%) is less absurd than a lot of public pension plans, but is still much higher than Mercer’s index rates.
If it were a corporate plan instead of a public pension, what sorts of yield curve assumptions would be typical? It looks like the law has been changed at least twice since I last did any pension work and I’m too tired to figure this out.
I don’t work in the corporate space any more so someone else may chime in, but I think you can find the segment rates here
I work on some corporate plans. At Kenny’s link you can refer to table 3A. It’s my understanding that the “24-Month Average Segment Rates Not Adjusted For 25-Year Averages” is a more reasonable interest rate actuarially, but for funding relief purposes the statutory interest rates are the “Post-ARP/IIJA Adjusted 24-Month Average Segment Rates” ones. We use the smoothed “Post-ARP/IIJA Adjusted” rates for minimum required contribution and the “not adjusted” rates for maximum deductible contribution.
Great, thanks both of you.