Focus
Full time employment: Posting here.
- Joined
- Oct 10, 2009
- Messages
- 640
Just got the annual funding notice for my (very small) pension. It's difficult to make out if the pension fund is healthy or not, thanks to a law passed by Congress that allows employees to use a 25-year average for interest rates instead of the previous two-year one.
In my plan, for example, things are either great (103% funding target attainment percentage, 25-year average) or just OK (82%, two-year average).
For those in the same boat, the best article I could find online on this is from two years ago:
Forbes: The Truth About Your Annual Pension Funding Notice
Because of the wide swing in the numbers shown above, I'm going more by this:
In my fund's case, that ends up being roughly 85%. I hope that's OK, based on the idea that anything above 80% is stable. I'd be more comfortable if it was higher, though.
In my plan, for example, things are either great (103% funding target attainment percentage, 25-year average) or just OK (82%, two-year average).
For those in the same boat, the best article I could find online on this is from two years ago:
Forbes: The Truth About Your Annual Pension Funding Notice
Because of the wide swing in the numbers shown above, I'm going more by this:
Another way to look at a plan’s funding status is to look at the fair market value—what the market says the assets are worth–divided by the liabilities. Congress allows plans to use actuarial values to determine funding status because actuarial values fluctuate less than market values. But the fair market value ratio really tells you how the plan is doing, Fuerst says.
The annual funding notices include this information for the end of the plan year in a separate paragraph typically headed “fair market value of assets.” GE, for example, as of Dec. 31, 2013 had $48,296,736,000 in assets and $53,150,133,000 in liabilities, which comes out to a 91% funded status.
In my fund's case, that ends up being roughly 85%. I hope that's OK, based on the idea that anything above 80% is stable. I'd be more comfortable if it was higher, though.