Pursuant to Reg. 67-1605(E)5, the Net Present Value for 101-500 weeks are calculated at the yield-to-maturity rate of the 5 year US Treasury Note reported by the Federal Reserve on the first business day following January 1st. The Regulation further states the discount rate shall not exceed 6% or be less than 2%. The 5 year Treasury published by the Federal Reserve on January 2, 2019 was 2.49%. Therefore, the Net Present Value for weeks 1-100 shall be calculated using a discount rate of 2%, the same rate in effect during the 2018 calendar year. The Net Present Value for weeks 101-500 shall be calculated using a discount rate of 2.49%. The discount rate for weeks 101-500 during the 2018 calendar year was 2.25%, so this rate change produces a slight decrease in commuted values. For example, 500 weeks reduces to 450.3298 weeks at the 2.25% discount rate. 500 weeks reduces to 445.3410 weeks at the 2.49% discount rate.
The present value of the commutable weeks shall be determined based on the present value tables in effect on the date of the award or settlement. You can do your own calculations of commuted value using our workers’ compensation calculators.
As always, feel free to call or email any of us at any time with questions or comments.