The average discount rate companies expect to use in calculating pension and retiree medical liabilities in 1993 is down more than 70 basis points, a new survey by Towers Perrin found.
The average discount rate expected to be used for calculating FAS 87 pension liabilities in 1993 is 7.3%, down from 8.08% a year ago.
Most companies surveyed by Towers Perrin reported a reduction in their discount rate of 50 to 75 basis points, and almost half by up to a full percentage point.
The firm also said the survey showed that the average discount rate expected to be used by companies for FAS 106 calculations is 7.35%, down from 8.14% a year ago.
Lower discount rates mean higher reported liabilities and expenses for employee benefit plans.