TAX 9873 Lecture Notes - Lecture 14: Employee Retirement Income Security Act, Warren Buffett, Tax Avoidance
Document Summary
Hafta 2014: purpose was to provide some relief for pension funding. Map-21 est. a corridor for the 24-month average segment rates, genr. beg. Each 24 month avg segment rate for plan yr was adjusted as needed to be within a specified percentage of a 25 year average of that segment rate thru 9/30 of preceding calendar year. Map 21 relief is a 2 edged sword. It perpetuates underfunded pensions in the hope that over time companies will recover, pension assets will grow, and interest rates will rise. The relief phases down (but not necessarily out) after 2016. Hafta extends map 21 funding relief for another 5 years so that the phase out of the map 21 rates does not start until 2017, rather than 2013. Plan funded less than 100%: funding deficit to be made up over 7 years (amortized); rolling 7. Plan funded less than 80%: potentially considered at risk and subject to accelerated funding requirements.
