DB 5 Myths: Myth 1 Pension, Lump sum, retirement plan, pension plan, retirement pension, defined benefit, PBGC, premium rates, funding, smooth, pension fund management, pension relief

For a total funding gap of $63 million vs.

$22 million

$40 M savings

The increase in rates resulted in a

The cost to annuitize declines aproximately

rise in discount rates

$13.5 M with each 50bp rise

in discount rates

REPLAY

BACK

Current assets are $225 M

$13 M

$275 M

At a 5.5% discount rate, your PBO liability is $235 M

Now, the cost to annuitize is reduced to about $11 M

BACK

A rise in interest rates can impact the cost of annuitizing...

what if the discount rate went from 4% to 5.5%?

BACK

Current assets are $225 M

At a 4% discount rate, the PBO liability is $275 M

The cost to annuitize is estimated at 5% or $13 M

For a total funding gap of $63 million

BACK

Current assets are $225 M

At a 4% discount rate, the PBO liability is $275 M

BACK

PBO liabilitiy based on a 3.75%

$275 M

in assets

$225 M

82%

Projected Benefit Obligation (PBO)

A plan with...

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BACK

Source: SEI analysis. For illustrative purposes only.

For a total funding gap of $63 million vs.

$22 million

The cost to annuitize declines aproximately

$13.5 M with each 50bp rise

in discount rates

$40 M savings

The increase in rates resulted in a

REPLAY

BACK

Current assets are $225 M

$13 M

$275 M

At a 5.5% discount rate, your PBO liability is $235 M

Now, the cost to annuitize is reduced to about $11 M

BACK

what if the discount rate went from 4% to 5.5%?

A rise in interest rates can impact the cost of annuitizing...

BACK

Current assets are $225 M

At a 4% discount rate, the PBO liability is $275 M

The cost to annuitize is estimated at 5% or $13 M

For a total funding gap of $63 million

BACK

Current assets are $225 M

At a 4% discount rate, the PBO liability is $275 M

BACK

discount rate

PBO liabilitiy based on a 3.75%

$275 M

in assets

$225 M

82%

Projected Benefit Obligation (PBO)

funded status

A plan with...

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