Thursday, August 09, 2012

More debate on the PBGC and interest rates


There is a debate going on about the way Congress and the Fed “manage” corporate pension contributions by manipulating the “discount rate”, a very technical subject for professional actuaries. At least Robert C. Pozen, at Harvard Business School, and Brookings  (book is “Extreme Productivity had said that Congress was still “kicking the can down the road” on the PBGC issues, something Obama had said must stop even before his inauguration.

The Post had run an editorial way back on April 15 supporting the president’s idea that the PGBC charge employers variable premiums based on their own stability.

Today, James Klein, president of the American Benefits Council, in a letter called “A pension picture that’s misleading” in print and “A better way to view pension guarantees” online. The brief letter supports allowing the use of lower interest rates to compute pension liability projections.

The link (leading to all other materials) is here

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