I'm in need of a math nerd.
I stand to collect a pension someday. My company's pension is private and fully funded, so odds are I will actually collect what I've earned, although it may be frozen at some future point since the calculation was recently cut in half for new hires.
I have spent 7+ years with my current employer and am fully vested. I believe the pension amount I've already earned ought to be part of our net worth calculation and my husband agrees, but we are unsure how to accurately value it. Should I estimate my life expectancy and calculate the full value of the pension out from there, or should I price an annuity for myself on the open market and base the pension's value on the cost of the comparable annuity? (There's a significant gap between those two amounts, hence this question.) Or is there some other valuation method you'd use? There is no lump sum option available, unfortunately.
If helpful, the pension benefit calculation is:
(Years of employment - 1) * (High-3 average salary) * 2.5% = Annual pension, payable at age 65.
COLA = 1% of final salary per year, cumulative, starting at age 66. (67=2%, 68=3%, etc.)