Tag: unfunded liabilities
Making liabilities look small doesn’t make them go away. In doing background reading to figure out how many companies may follow IBM and reopen a closed defined benefit plan, commentators kept referring to “funding relief,” which – combined with the improved funded status and de-risking – has dramatically reduced the likelihood that a company would…
The brief’s key findings are: The inclusion of “legacy debt” – unfunded liabilities from long ago – with current liabilities impedes effective pension policy. A new approach would separate legacy debt from other unfunded liabilities in order to: spread the legacy cost over multiple generations; and properly identify fixed vs. variable costs. It would also…
