Random Musings wrote:MAP-21' which was part of a transportation bill
Tigermoose wrote:I recently received a notice from a past employer about changes to the pension. MAP-21 changed how the pension fund calculates its liabilities. Prior to MAP-21 pension plans determined their liabilities using a 2 year avg of interest rates. After MAP-21, now pension plans must take into account a 25 year avg of interest rates. This means that MAP-21 interest rates likely will be heigher and plan liabilities lower than they were under prior law. As a result, my former employer may contribute less money to the plan at a time when market interest rates are at near historic lows.
Should I be concerned about this? It seems like the law was changed to help mask over the fact that the pension funds are underfunded given the low rates. This method seems to assume that the 25 year bond bull market will more accurately reflect the next 25 years rather than the last 2 years of financial repression. Should I take action?
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