Tuesday, May 7, 2013
Moving Ahead for Progress in the 21st Century Act (MAP21)
MAP-21
Buried in a transportation bill called MAP-21 (passed last June by Congress) is the root of the confusion regarding pension valuation/liability. Link below is an analysis from vanguard explaining details.
Key Points:
- Congress changed the interest rate used to project pension liabilities from a 2-year avg to a 25-year average.
- They required a significant increase in PBGC contributions.
https://institutional.vanguard.com/iam/pdf/REGC21.pdf
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2 comments:
Good news that they're finally going to up the PBGC contributions. That was sorely needed. And if I read this right, sounds like a 40% increase over a couple of years.
Need to keep an eye on that and make sure it actually happens...if it does, it's a very good thing.
Reading this, it doesn't seem to be as simple as just 2-year average vs 25-year average, but that is the general shape and direction of the change. And it does explain the very different sets of numbers in the recent mailer on the pension. Strange that this was in a transportation bill, but I guess these are the ways of washington.
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