Calculating the Performance of a Contributory Pension Taken as a Lump Sum

@Bigwig55 I think I understand your question. Essentially, you are trying to find a rate of return using your contributions to a defined benefit pension plan for 26 years and the lump sum amount that your plan developed. I have used the following calculator https://www.calculatorsoup.com/calculators/financial/future-value-annuity-calculator.php Please note the calculator is designed to develop a future value (i.e., your lump sum amount) for a series of deposits (i.e., your pension contributions,etc) based on given interest rate. I realize you are trying to find the interest rate (i.e., rate of return over 26 years). However, you can change the interest rate with one input and click calculate until you arrive at a future value close to your lump sum amount. You can make a few changes to the interest rate very easy as opposed to calculating 312 separate calculations with deceasing time values. For example, I used 3% as the Annual Nominal Interest Rate. As I understand your question, this is the interest rate (rate of return) you are trying to find. Next, I used 26 years for the number of periods with compounding 12 times per period. Next, I used starting pay at $50,000/year which will be $750/year or $62.50/month. Remember, if you are solving for monthly contributions and monthly compounding, you need to convert annual amounts to monthly by dividing by 12. Consistency is the key. Next, I grew your contributions (i.e., payment growth rate) by 3% annual or .25 monthly. This is where you may be slightly overstating your contributions since pay increases may occur annual as opposed to monthly. You be the judge of that dynamic. There is a difference, but it is not significant. The future value amount is $42,391.34 Compare this amount with your lump sum amount and make changes to the Annual Nominal Interest Rate until you are close. Please note that your question is more appropriate for a defined contribution plan such as a 401 K, IRA, etc. However, if your pension is a defined benefit pension plan (i.e., Career Earnings with employee contributions,etc.), there are other factors that are used to develop your pension as well as your lump sum amount. Your HR Dept. may help. If HR has outsourced that duty, ask the Plan Administrator.If the Plan Administrator has outsourced that duty and/or uses a third party,good luck. FYI, defined benefit pensions use concepts such as immediate payment or deferred, age, life expectancy, mortality credits, maybe career earnings or some other approach (i.e., last three years, best five years out of 10 years, etc.). So, if you are older(i.e., age 65 or greater,etc.), do not be surprised if your lump sum is significantly more than the future value of a series of deposits. Hope this helps.