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Old 05-10-2016, 12:04 PM   #21
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Interesting. Another good link. Thanks!

This is a real killer for me
Quote:
Nyhan said the fund also took issue with Treasury's conclusion that the fund's use of a 7.5 percent interest rate assumption was unreasonable and overly optimistic. This conclusion led to the department's finding that the fund hadn't shown that its application was likely to lead to the plan's solvency within 10 years.

It is important to note, Nyhan said, that if the fund had used a lower investment rate of return, which is what Treasury said it should have done, the result would have been “much deeper cuts to benefits than were contained in the rescue plan.”
In other words, we used a higher rate because a lower rate wouldn't work.

Treasury spells out it's position very clearly. The CSP is using a rate of return that is too optimistic, based on what their own third party surveys are suggesting they use. They have nowhere to go.
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Old 05-10-2016, 11:01 PM   #22
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It is not true they have nowhere to go, the plan has got to propose cutting the pension even more deeply than it did, it is the only option Treasury has given them. So they will probably be back with 75% cuts in the pensions, which from what I am reading is still more than if the PBGC takes it over as 1K per month is maximum PBGC will pay multi-employer plans. This is the first of a trend and it is being set up as an example I think for state plans and Puerto Rico on what the Treasury position is on pensions and level of pension cuts they feel need to be made.
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Old 05-10-2016, 11:18 PM   #23
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What was interesting is that UPS got out of the pension fund with a 6.1 Billion dollar payment avoiding the 600 million per year it was paying into the fund and then fund promptly lost 60% of that money in the market debacle of 2008-9. At that point the UPS employees were then 40% funded, as the funds were only for retired UPS workers as UPS took the working employees with them and so there was no way no matter how good the market did with the high withdrawal rate that Central States could ever pay those pensions.
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Old 05-11-2016, 05:09 AM   #24
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Originally Posted by Running_Man View Post
It is not true they have nowhere to go, the plan has got to propose cutting the pension even more deeply than it did, it is the only option Treasury has given them. So they will probably be back with 75% cuts in the pensions, which from what I am reading is still more than if the PBGC takes it over as 1K per month is maximum PBGC will pay multi-employer plans. This is the first of a trend and it is being set up as an example I think for state plans and Puerto Rico on what the Treasury position is on pensions and level of pension cuts they feel need to be made.
When I said "nowhere to go" I was referring to their rebuttal of the Treasury rejection. Yes, they need to go back and change the proposal.
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Old 05-11-2016, 06:02 AM   #25
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Is this yet another canary in the coal mine moment?
In your analogy, what is the coal mine?
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Old 05-11-2016, 06:07 AM   #26
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In your analogy, what is the coal mine?
I would think the coal mine in this case is the pension fund itself, specifically its financial health and solvency.
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Old 05-11-2016, 11:16 AM   #27
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In your analogy, what is the coal mine?

General pension fund crisis in the country, both public and private.


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Old 05-11-2016, 09:19 PM   #28
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General pension fund crisis in the country, both public and private.


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I think these multi-employer plans have unique issues beyond the general pension fund issues, so no this is not a canary in the coal mine.


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