This reading and especially the questions are very poorly drafted.
Specifically, the facts for question 1-6 are highly confusing. If pension payments are inflation-adjusted, then how is it reasonable to assume that liabilities associated with deferreds and active accrued segments are fixed? In other words, in finding PV of pension liabilities don’t you discount expected future benefit payments? If so, is it not incorrect to assume those benefit payments are fixed, when the facts state that are subject to COLA?
To me, it would be reasonable to assume that liabilities associated with deferreds would also be like real bonds since their benefit payments (when they receive them in the future) will be subject to COLA.
Any feedack or explanation would be much appreciated.
Thank you in advance.