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Ways Low Interest Rates Increase Pension Deficits

Tuesday, November 13, 2012 - 4:35 AM
It's not just lower investment returns. According to this WSJ article, Dealing With the Pension Deficit:
Low interest rates hurt pension funds in two ways. First, they limit investment returns. Second, companies calculate the present value of their future pension liabilities using a so-called discount rate, which is based on corporate-bond rates. A lower rate means higher liabilities.

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Ken TuminKen Tumin5,471 posts since
Nov 29, 2009
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