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HAFTA Smooths Highways, and Pension Funding, Too
Benefits Bryan Cave Link to more items from this source
Aug. 14, 2014
"Absent pension smoothing, the law mandates that the assumption be based on relatively current interest rates.... One could argue that such an assumption is unreasonable. For a plan designed to pay benefits over decades, does it really make sense to assume such a low rate? Couldn't that result in significantly overfunding the plan (potentially to the detriment of the company since it can't really get that money back) when interest rates rise? Conversely, when interest rates rise, does it make sense to potentially underfund the plan at those higher rates since interest rates may go down?"

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