Actuarial Present Value [Internal Revenue] Law and Legal Definition

Pursuant to 26 CFR 1.401(a)(4)-12 [Title 26 Internal Revenue; Chapter I Internal Revenue Service, Department of the Treasury; Subchapter A Income Tax; Part 1 Income Taxes; Normal Taxes and Surtaxes; Deferred Compensation, Etc.; Pension, Profit-Sharing, Stock Bonus Plans Etc.], the term Actuarial Present Value means “the value as of a specified date of an amount or series of amounts due thereafter, where each amount is --

(1) Multiplied by the probability that the condition or conditions on which payment of the amount is contingent will be satisfied; and

(2) Discounted according to an assumed rate of interest to reflect the time value of money.”