pension valuation

Pension valuation is the process of determining the current value of a pension fund’s future benefits and liabilities. It involves estimating how much money needs to be set aside now to pay for future pension commitments, considering factors like expected investment returns, inflation, and employee longevity. This helps ensure that the pension plan has enough assets to meet its obligations. Essentially, it's a way to assess whether the pension fund is financially healthy and capable of fulfilling promised retirements, guiding decisions on funding strategies and risk management.