Arcane Actuarial Science Widens Divide Over Pensions Financial Times (07/29/03) p.9; Cohen, Norma
A growing political chasm regarding pension provision in the United States is pitting Congress members who wish to lessen the burden of trying economic conditions for some of the country's biggest employers against those who want to make certain that taxpayers do not bear the brunt of paying promised pensions to former employees. A House Ways and Means committee has been working on a pension finance bill, including clauses that would permit firms to reduce millions of dollars from the amounts they must put into underfinanced pension plans. The Portman-Cardin bill would revamp the way plans determine their liabilities, employing a steeper interest rate to discount future spending, resulting in smaller contributions now. The heart of the legislation would permit employers to use a combined average of corporate bond yields averaged over a period of four years. Then, with reduced liabilities, contributions paid during the present tough trading times could be lowered. The bill has the support of several employer and labor organizations, including certain parts of the actuarial industry. Conversely, it has caused alarm among others, who see a potential crisis looming in the form of one similar to that facing the U.S. savings and loan sector when taxpayers' money was spent to meet claims on U.S. deposit insurance plans.