One of my earliest defined benefit (DB) clients, in the early 2000s when actuaries still had broad discretion over interest rate assumptions, was using 8 percent as the discount rate for liabilities. As a quick explanation of what this means, an 8 percent assumption implies a dramatically cheaper funding cost than, say, a 6 percent assumption, because it costs less to accumulate assets over time if you earn more interest. As it turned out in the “lost” decade, anything over 6 percent was too high. Read full article…
The Progress and Future of PEP Construction and Regulation
The pandemic has delayed construction of pooled employer plans (PEPs) by at least a few months,...