kronan

My understanding of how the "hurdle rate" works is based on the comments by Greg Reardon in the MEC 2018 video-roughly about 20 minutes in.
And, you have to remember that the PSPP is a Variable Benefit plan with a pot of money built via yearly contributions by the company as a defined percentage of pay (a percentage never explicitly defined by our Union, IMO-out of a concern for how a subset of the crewforce would react)
The benefit accumulation was defined as 2%.
And, the initial accumulated Pension was defined as the Greater of
1. Accumulations + Market returns in excess of the hurdle rate.
2. A 2% floor, basically the year by year accumulation of Salary*2% (Up to the DC limit)
{3rd one added in later in the game to protect those QOL folks who stay FO's and\or only work 50-70% of their BLGs}

So, hurdle rate was 5%.
Year one value of our notional shares was based at $10. And that it's a Notional value is important to remember. It's not a value established by purchases the way a mutual fund is. It's notional.
So, in the video example, ROI on our Trust fund was 7.5%. Notional value of our shares increases 2.5%.
Year 2, ROI was 3%. So, notional value of our shares decreases 2%
But, that winds up with an accumulated benefit that would be below the running total of our Floor Benefit. So, you'd get the floor benefit.

Now, in this example, what actually happened to our big pot of $$. In year one, it grew 7.5%. Getting into year 2, we'd have a nominal 200'sh people begin collecting from it but there'd be a company contribution to it as well as the ROI of 3%.
Rinse and repeat.