Proposed Pension Funding Stabilization

[Arthur Kade]

SOA Research

http://www.soa.org/research/research...n-funding.aspx

[SirVLCIV]

Looks like it's happening. PBGC premiums also going up.

[Zakk Wylde]

Oddest thing I've seen so far -- the variable premium will now be indexed to inflation.

Also, the annual funding notice will be further warped by adding a comparison of plan liabilities both with and without interest rate stabilization.

[Arthur Kade]

* Would effectively prescribe a pattern of valuation interest rates
* Initially aggregate contribution requirements would be significantly less than under current but would then be expected to increase each year until ultimately exceeding the amounts that would have been required under current law (translation: I'll gladly pay you tomorrow for a hamburger today)
* Prescribed rates would mask market-related changes in funded status for several years

Isn't this just a sneaky way of repealing PPA?

[exactuary]

Originally Posted by Arthur Kade

Isn't this just a sneaky way of repealing PPA?

Yes

[Zakk Wylde]

:crickets:

Everyone must be too busy doing funding relief to talk about funding relief.

[Duffer]

Not much to say here. The federal budget depends on excessively low interest rates to please borrowers, including the US govt. When the rates hit historic lows, it became a choice between killing private DB pensions or allowing saner interest rates for long-term funding.

[Rick_G]

I have been following a very active discussion on the ACOPA forum.

[Wag, the Dog]

Originally Posted by Zakk Wylde

Everyone must be too busy doing funding relief to talk about funding relief.

The first rule of funding relief is that you don't talk about funding relief.

[Pills]

Originally Posted by Rick_G

I have been following a very active discussion on the ACOPA forum.

I've been reading the posts, too. I mostly work with small plans (majority are under 10 people). Because 417(e) rates aren't being changed, I'm going to have to explain to a bunch of people that while costs are down, you're only screwing yourself.

My one case that only allows annuities was very happy to hear about their relef.