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Divorce Calculations

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What interest rates are people using to perform PV calculations in Divorce Cases? PBGC, GATT, 90 Day Treasury, Current, Historical, Other?

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I think you should be very careful here. Many DB plans offer lump sums only in limited cases, such as the familiar $3500/5000 limit. If you have an accrued benefit whose value is clearly over the Plan's limit for cashouts, then any lump sum you give needs to be heavily caveated. We ask the client if there is a need for a lump sum, explaining that the Plan definition may not provide any value and can convey a benefit feature that does not really exist. For example, if your plan uses GATT rates and you did a calc now, you might be using a rate of 5.2%, pretty low. But if that EE were to terminate employment one year later, the rate might be 6% and the lump sum could actually decrease. If you show any lump sum, you probably need some idea of what it is likely to be used for; if a court has requested it, or attorneys for both sides have agreed to the basis, then go ahead, but always describe the census data being used and the actuarial assumptions. We also include a statement that we are not certifying that the lump sum represents the "market value" of the benefit.

Another point is that most plans do not allow any payment while an EE is still employed. A statement to that effect is also good.

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