Posted 10 months ago on May 8, 2013, 12:41 a.m. EST by Shule
This content is user submitted and not an official statement
How do they make these federal laws sound so good (sic)? Take this one I learned about yesterday from a letter sent to me by the company I work for informing me about how my pension plan just changed. (If you're one of those few lucky folks who actually have a pension plan also, you probably got a letter too.) The letter tells me of a change in the federal law called "Moving Ahead for Progress in the 21st Century (MAP-21) which allows companies to determine their pension fund "liabilities" using an interest rate average computed over twenty-five years instead of two. As interest rates were much higher twenty something years ago, this allows the corps to calculate the money they must contribute into people's pension funds with a higher average interest rate which in turn results in a lower contribution number; i.e. the corps can now put less money into their employee's pension funds. Sweet (for the corps), and they call that progress.
If interest rates don't start going up anytime soon existing pensions plans may go into default.