Companies that offer defined benefit plans are required to make annual contributions on behalf of covered employees. Minimum contributions must equal what is needed to provide benefits from the plan, given such factors as present value and inflation. The IRS has just issued final regulations to help calculate interest rates for the present value of defined benefit plans. The regs specify a methodology for determining the corporate bond yield curve that’s similar to the method currently used. But there are two new factors: 1) a “hump adjustment variable” that peaks at 20 years maturity and 2) a narrower exclusion for callable bonds. To read the final regs: https://bit.ly/3NZvpl5
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