AT & T Case Summary
On the subject of discount rate, AT&T uses a discount rate of 5.00% as of December 31, 2013. It is the rate used in order to estimate the targeted benefit obligations that must be paid among “participants.” The discount rate used by AT&T is based on some aspects, such as a “yield curve” of rates of return of high quality corporate bonds. In fact, as of December 31, 2013 the discount rate of 5.00% has actually been applied with a .70% increase. This resulted to a decrease on the pension plan benefit obligation by $4,533. On the other hand, on December 31, 2012, the discount rate that was applied was decreased by 1.00%, which consequently increased the pension plan benefit obligation by $7,030 (AT&T Inc. 2013 Annual Report 61). In terms of the