Isn the Present Value Calculation Merely Speculative?
Without knowing the exact date of death for a plan participant, one cannot calculate with precision the current lump-sum value of all their pension payments. Thus, it is impossible to know the exact value for a specific individual. However, one can establish with excellent accuracy the fair market value of a pension as measured by its replacement costs. Depending on one’s definition of the pension’s present value, the exercise may or may not be merely speculative.
