Glossary Term 4 min read Updated September 2026

Actuarial Present Value (APV) - Definition & Formula

Understanding Actuarial Present Value, combining interest rate discounting with mortality and survival probability curves.

Actuarial Review Board Peer-Reviewed

Verified by Certified Pension Actuaries (FSA / EA / CFA) • IRS 417(e) Methodology

Definition

Actuarial Present Value (APV) is the expected value of a future contingent cash payment or annuity stream, discounting not only for the time value of money (interest) but also for the conditional probability that the recipient will be alive to receive each payment.

Actuarial Formula

APV = ∑ [ C_t × _t p_x / (1 + r)^t ]

Where _t p_x represents the probability that a person currently aged x survives another t years.

Authoritative References & Official Regulatory Sources

Verified citations from official government databases, actuarial research bodies, and statutory documentation.

Official Citations

Internal Revenue Service (IRS.gov) U.S. Government

IRS Notice: Minimum Present Value Segment Rates (§ 417(e))

Statutory 3-tier corporate bond yield curve segment rates used by corporate plan sponsors to calculate legal minimum lump-sum buyouts.

Inspect Regulatory Source

Pension Benefit Guaranty Corporation (PBGC.gov) Federal Agency

PBGC Maximum Monthly Guarantee Tables for Defined Benefit Plans

Statutory federal insurance guarantee limits protecting private pension participants in the event of corporate plan termination or bankruptcy.

Inspect Regulatory Source

Society of Actuaries (SOA.org) Actuarial Standard

Society of Actuaries (SOA) Pri-2012 & Pub-2010 Mortality Study Tables

The institutional empirical mortality tables and generational mortality improvement scales (MP-2021) powering actuarial present value projections.

Inspect Regulatory Source

Social Security Administration (SSA.gov) U.S. Government

Social Security Administration: Actuarial Period Life Table

Official U.S. decennial life expectancy and survival probability curves for male and female retirees across single and joint age horizons.

Inspect Regulatory Source

Definition

Actuarial Formula

Authoritative References & Official Regulatory Sources

IRS Notice: Minimum Present Value Segment Rates (§ 417(e))

PBGC Maximum Monthly Guarantee Tables for Defined Benefit Plans

Society of Actuaries (SOA) Pri-2012 & Pub-2010 Mortality Study Tables

Social Security Administration: Actuarial Period Life Table

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