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Employment Benefits Discount Rate: Anything Wrong with Expected Return on Plan Assets?

  • PSAS - PSAB Image

Jan 04, 2018

On January 4, 2018, the Public Sector Accounting Board (PSAB) published an article about the debate on whether the expected return on plan assets, commonly used in the public sector in discounting obligations for funded benefit plans, is an appropriate discount rate for determining benefit obligation.

A recent stock contribution made by Boeing to its pension plan illustrates the debate over using the expected return on plan assets as the discount rate in determining employment benefit obligation.

The PSAB is considering the appropriate discount rate guidance that should be provided in its employment benefits standard. The expected return on plan assets is usually used in calculating the obligation of fully or partially funded benefit plans in the public sector.

Review the full article on the PSAB's website.

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