How do you model a defined-benefit pension obligation profile over 30 years for a valuation?

Pension cash-flow model:

• Split the population: active members (still accruing), deferred vested (left with a preserved entitlement), pensioners (in payment).
• Cash-flow projection: active members generate future service cost (working lifetime). Deferred vested: no service cost, but indexation. Pensioners: ongoing cash payments, declining with mortality.
• Mortality: use a standard generational mortality table — typical life expectancy at 65: men to ~84, women to ~87.
• Indexation: an inflation adjustment; in many jurisdictions a statutory review obligation (e.g. every 3 years). Assumption often 1.5–2.0% p.a.
• Discount rate: market-based; IFRS uses the current AA corporate-bond yield (5–10y duration matching). Discounting: the PV of the future cash flows = DBO (defined benefit obligation).
• Funding status: DBO − plan assets = net liability.
• Sensitivity: a 1% rise in the discount rate = a 12–18% DBO reduction.