joe_momma
9th March 2011, 08:07 AM
http://blogs.marketwatch.com/fundmastery/2011/03/08/is-the-cia-pension-plan-broke/
(snip)
What the last line above (amortized cost of recapitalizing the system) means is that this plan is going to need similar cash infusion of $500 million or more over the next 20 years to keep it afloat.
... there are only four possible reasons I can think of for having an unfunded liability of this magnitude in a pension plan. Those are:
* Very poor investment results that are far below the actuarial assumption [the actuarial assumptions is a long-term rate of return estimate that a given pension plan's actuaries use to determine funding requirements and long-term liabilities].
* Failure to make annual contributions as called for by the plan’s actuaries.
* Benefit increases that have been added, but not been funded, over the years.
* Fraud.
(snip)
What the last line above (amortized cost of recapitalizing the system) means is that this plan is going to need similar cash infusion of $500 million or more over the next 20 years to keep it afloat.
... there are only four possible reasons I can think of for having an unfunded liability of this magnitude in a pension plan. Those are:
* Very poor investment results that are far below the actuarial assumption [the actuarial assumptions is a long-term rate of return estimate that a given pension plan's actuaries use to determine funding requirements and long-term liabilities].
* Failure to make annual contributions as called for by the plan’s actuaries.
* Benefit increases that have been added, but not been funded, over the years.
* Fraud.