Double Your Bailout Money With 0% Interest

In 2019 there were 1,219 union plans with Schedule MB attachments. Of those 1,209 used an interest rate of between 2.92% and 8.5% to calculate their liabilities for valuation purposes. One used 70% but presumably that was a typo on the form.

Nine others had that item blank:

Two of those nine filed a blank form.

Six others left that item blank by accident as the funded ratios for those plans as compared to the RPA funded ratios indicate that an interest rate should have been inserted.

The actuary for the last plan (EIN: 231729633) really did have 0% interest as his best estimate of the valuation interest rate to use at the time though two months earlier for another plan his best estimate was 7.5% and four months later another actuary at the same firm had 6% as his best estimate for yet another plan.

The valuation interest rate, if low enough, is a critical part of the calculation of how much bailout money an insolvent union plan can get under the PBGC SFA Program. All three plans are insolvent and applied for bailout money. The one using 0% interest is asking for more than double as a percentage of their RPA liabilities of what the other applicants are asking.

2 responses to this post.

  1. Posted by aon12345 on November 9, 2021 at 1:41 pm

    I really would be interested in understanding why you think comparing current liability to the SFA amount is even remotely rationale. Are you just that clueless in what is going on?

    Reply

  2. Posted by aon12345 on November 11, 2021 at 3:19 pm

    I gather by your lack of reply that you have realized your comparisons are meaningless and should be ignored by any readers of this blog.

    Reply

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: