pension underfunding is interesting! Wharton
Posted: Sat Aug 09, 2003 3:22 am
Plunging asset values and rising liabilities have led to an estimated $300 billion shortfall in the aggregate level of funding among U.S. corporate pension plans, thrusting an otherwise dry subject - often of interest only to actuaries and accountants - into the headlines.
during the stock market boom of the late 1980s through the 1990s, companies had been eager to fund or even overfund their pension plans, since the investments could grow on a pre-tax basis. But Mitchell explains that pension regulation cracked down on this practice to prevent a drain on Treasury revenues. "You could argue that companies had tried to save for the proverbial rainy day," says Mitchell. "But then the regulators drastically limited this way of saving."
http://knowledge.wharton.upenn.edu/whatshot.cfm