Editorial Board

Don’t Stick Taxpayers With Underfunded Corporate Pensions

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When Congress passed a transportation bill in July, it included important changes to rules governing corporate pensions. Unfortunately, these changes will allow companies to underfund their pension plans, which will cost taxpayers down the road.

As usual with bad pension policy, the rules involve a complex accounting issue. In this case it’s “discounting,” the process by which a pension actuary determines how many assets a fund must have today to cover payments that come due in the future.