Many defined benefit pension plans have a target rate of return on investment equal to ________.

Question

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Defined benefit pension plans typically have an assumed actuarial rate of return (often around 7-8%) that they target in order to fund future pension obligations. This assumption takes into account factors such as inflation, market returns, and the plan's investment strategy. It is not necessarily tied to the firm's return on equity or the share market return.

Many Defined Benefit Pension Plans Have a Target Rate of Return