Patent ID: 7647239

Claim:
A computer-implemented method of determining employer liabilities and a resulting contribution to a pension plan, comprising: providing a processor configured with a set of instructions that when implemented by the processor comprise the steps of: (a) determining a smoothed discount rate based at least on an assumed long-term discount rate and an actual return on market value for one or more time periods that define a look-back period preceding a determination date, comprising: (i) determining a compounded expected return over a period of time based on the assumed long-term discount rate; (ii) determining a compounded actual return over the look-back period; (iii) computing an adjusted expected rate of return over a future period of time remaining in the period of time based on the compounded expected return and the compounded actual return; (iv) based on a corridor C, determining an upper limit and a lower limit of a range about the assumed long term discount rate, where the upper limit equals the assumed long term discount rate times the value (1+C) and the lower limit equals the assumed long term discount rate times the value (1−C); and (v) setting the smoothed discount rate when: a) the adjusted expected rate of return is less than or equal to the upper limit and greater than or equal to the lower limit, then the smoothed discount rate is set to equal to the adjusted expected rate of return; b) the adjusted expected rate of return is greater than the upper limit, then the smoothed discount rate is set equal to the upper limit, and c) the adjusted expected rate of return is less than the lower limit, then the smoothed discount rate is set equal to the lower limit; and (b) utilizing the smoothed discount rate in place of the assumed long-term discount rate when determining the employer liabilities and the resulting contribution of monies to the pension plan; and transferring the resulting contribution of monies to a fund that holds pension plan monies.