PBGC Simplifies Rate Valuation Calculus for Distressed Pensions

The federal government’s private-sector pension insurer has finalized new rules modernizing the methods it uses to value assets in distressed or involuntarily terminated plans it oversees.

Rules the Pension Benefit Guaranty Corporation first proposed in August 2023 will take effect in July, updating interest, mortality, and expense assumptions the independent agency uses in valuing single-employer and multiemployer plans.

PBGC will begin using publicly available yield curves to value assets instead of a two-component interest rate approach it has used since 1993. The new rules will enable market interest rates to be considered in final assumptions, update mortality tables, and simplify ...