How do I value my pension plan?

Determining the fair market value for certain types of retirement accounts can be a complicated process.  Defined Benefit pension plans provide an estimated payment stream or payout sometime in the future and will have a calculated net present value that will represent its current value.  Many assumptions go into any calculation of today’s value and sometimes pensions have multiple payout methods (lump sum at retirement, annuity (which is a set payment stream) until the retiree’s death, annuity certain for 10 years, etc.   The assumptions made when valuing the benefits can greatly change the current value calculation.  The best thing to do is to hire an independent expert in the area of valuations of these types of plans to determine the fair market value that will be used in the settlement process.