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Pensions & Other Post-Employment Benefits 2014

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Pensions — Discount Rate v Expected Rate of Return on Assets

Pension Plans - Discount Rate v Expected Return - 2010-2014 Q4 (200)For the close of 2014, the discount rate used to measure obligations under defined benefit pension plans dropped back to 2012 levels, after increasing for 2013. The lower red line of this chart shows average discount rates used at the close of fiscal years ending in 2000 through 2014 for the pension plans of 200 U.S. corporations with fiscal years ending in the 4th quarter of the calendar year. The upper blue line on this chart shows the average rate of expected investment return on pension assets used for the pension cost for those 200 companies for 2000 through 2014. Overall, companies have been selecting lower rates for expected asset returns under their pension plans throughout the recent 15 years. See Pensions — Discount Rate v Expected Return for further discussion of these factors and trends.

(As I’ve previously disclaimed, posts such as this represent efforts of my favorite pastime. My formal work does not involve any of this, and none of it represents any position or comment that should in any way be attributed to my employer. Likewise, as always, it represents general personal impressions and should not be treated or used as formal professional advice.)

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Written by macheide

1 March 2015 at 1:31 pm

Posted in άctuary

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