THe swchezer says : Increasing discount rate will usually reduce Interest cost ( PBO * Discount rate).
Can anyone help explain why? From my understsanding there are 2 effects here:
-Increasing discount rate will increase interest cost (1)
-Increasing discount rate will lower PBO (2)
Normally the (2) effect will be more profound ( for plan that is not mature yet), thus Interest cost is reduced.
Am I getting it right ?
How can we know if the plan is mature or not?