**GAO-03-313**                      Published: Feb 27, 2003. Publicly Released: Feb 27, 2003.                  

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## Highlights

Employers with defined benefit plans have expressed concern that low interest rates were affecting the reasonableness of their pension calculations used to determine funding requirements under the Employee Retirement and Income Security Act of 1974 (ERISA). ERISA requires employers to use a variation of the 30-year Treasury bond rate for these calculations; however, in 2001 Treasury stopped issuing the 30-year bond. This report provides information on (1) what characteristics of an interest rate make it suitable for determining current liability and lump-sum amounts; (2) what alternatives to the current rate might be considered; and (3) how using an alternative rate might affect plan participants, employers, and the Pension Benefit Guaranty Corporation (PBGC).

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## Matter for Congressional Consideration

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## Topics

Retirement Security

Interest ratesPensionsStrategic planningBond marketSecuritiesUS Treasury securitiesInsurance companiesMortalityEmployee benefit plansPension plan