Similarly, if the assumed rate of return exceeds the top of the range, MERS will reduce the assumption so that it falls within the high end of the range. All assumptions are reviewed with the Board of Actuaries. The discount rate is currently equal to the expected rate of return on investment based on historic al rates. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. Section 3.6.3, Combined Effect of Assumptions, was added to provide guidance regarding the combined effect of assumptions. Interest rate assumption--Suspension of new supplemental pension contracts--No right to particular price. The two most typical are (1) converting the rates from certain published bond indices from a reported semi-annual compound rate basis to an annual discount rate basis and (2) arithmetic rounding. Similar to the demographic information discussed in, The assumed discount rates should be reevaluated at each measurement date (including interim remeasurements required in connection with accounting for plan amendments, curtailments, and settlements) to determine whether they continue to reflect the best estimates of then-current rates (see, The SEC staff provided guidance on the selection of discount rates in. That compares with 14% of operating revenue . For example, some actuaries have looked to surveys of economic assumptions used by other actuaries, some have relied on detailed research by experts, some have used highly sophisticated projection techniques, and many actuaries have used a combination of these. . d. historical national wage increases and productivity growth. Warning: Each web version of an ASOP is provided as is for convenience of the user only and is not, and should not be considered to be, the official version of an ASOP. Although there is some latitude regarding the methodology that may be selected to determine the discount rate, the approach selected should be followed consistently. b. Defeasance or SettlementAn actuary measuring a plans present value of benefits on a defeasance or settlement basis may use a discount rate implicit in annuity prices or other defeasance or settlement options.
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