HOW DO YOU DETERMINE THE DISCOUNT RATE UNDER GASB 67/68?
Future benefit payments are required to be discounted using a single blended rate. The blended rate is based on a “crossover” calculation that takes into account:
- The plan’s current funded status,
- Expected investment return, which depends on the fund’s investment mix,
- Projected future contributions and benefit payments to and from the fund; and
- A municipal bond rate, after the “crossover” point (if any) when pension trust assets are depleted.