Reply #33: Well, yes and no.

[Frodo]

(Yes, I DO want my pension. There are few enough companies left that HAVE them in the first place).

The bill could actually solve many fo the problems in the industry right now. The biggest problem is that low interest rates, while not directly tied to pension assets, affect the calculation of how much money a company should have today in the fund to pay your fiture benefits.

If you are 29 today and have earned (so far) a $5,000/year pension that you will start receiving benefits at 65. The company would need to have about $10,000 in your name today to fund that if the government says they have to calculate it based on a 6% return.

The same benefit calculated at 8% would only require $3900 to be set aside by that same company.

So the question of pension funding is largely "what rate of return will the plan earn over the next "x" years?" And even though the average investment portfolio can be expected to earn (over decades) well above the current calculated rates (based on currently super-low treasury securities), the law says they have to calculate using that lower number. It's largely a problem of calculation, rather than funding (in most cases).

They could "fix" the problem by raising rates, so that the calculated "required" balances come back in-line with what you can expect the fund to earn - but that wouldn't help Bush out, would it? OR, they can change the calculation to reflect something "rational", but still outside the control of the regulated industries... and since most pensions hold a significant mix of corporate bonds it makes some sense.