Wednesday, December 31, 2008
Auditors are pressing companies to reconsider how they calculate their pension liabilities and urging them to use formulas that could give rise to much larger reported deficits than would be the case if they stayed with the current approach.
Friday, December 12, 2008
AIG is engaging in extreme price cuts to hang onto market share and may be using money from its federal bailout to pay for it, insurance insiders said. The CEO of Liberty Mutual said AIG is "doing some very stupid things" that are in danger of destabilizing the insurance market. An AIG spokesman denied that it is cutting prices.
Was passesd by the House on Wednesday and the Senate yesterday. It is unclear whether Bush will sign it.
- Provides that shortfall amortization contributions will be based on a percentage of the funding target. The percentage will be 92% in 2008, 94% in 2009 and 96% in 2010, before reaching 100%. For example, under PPA a plan funded at 90% in 2008 had to establish an shortfall base equal to the entire 10% unfunded. Under the Act, this same plan would establish a shortfall base of only 2%.
- Permits asset smoothing.
- Provides that for the first plan year beginning on or after 10/1/2008 the test for the restriction on benefit accruals will be done using the greater of the current year or prior year AFTAP.
- Clarifies that plan expenses must be included as part of the target normal cost.
- Clarifies that target normal cost is reduced by the amount of mandatory employee contributions expected to be made during the year.
- Contains other provisions such as a waiver of age 70-1/2 distributions for 2009 for defined contribution plans, multiemployer funding relief, changes to maximum benefits for small employers and airline specific provisions. In addition, the Act includes some technical corrections.