Courtesy of Mish.
Buried in a transportation bill that President Obama signed on July 6, 2012, was a change to make it appear pension plans are better funded than they really are.
The bill was called Map-21 “Moving Ahead for Progress in the 21st Century Act”.
Here is a catchy logo and stated goals.
Supposedly the three core principles of the bill are:
- Raise the bar to enter the industry and operate on our roads;
- Hold motor carrier and drivers to the highest safety standards to continue operations; and
- Remove the highest risk drivers, vehicles, and carriers from our roads and prevent them from operating.
MAP-21 took effect October 1, 2012. Budget is $561 million in fiscal year (FY) 2013 and $572 million in FY 2014 for the Agency’s administrative expenses and grant programs.
Pension Progress?
So what does this have to do with pensions? Nothing of course (except for the fact that this is another one of those bills that you have to pass to see what’s in it, and more importantly how the bill works in real life.)
Buried in the Text of Map-21 is SEC. 40312. PENSION FUNDING STABILIZATION.
“(I) IN GENERAL- If a segment rate described in clause (i), (ii), or (iii) with respect to any applicable month (determined without regard to this clause) is less than the applicable minimum percentage, or more than the applicable maximum percentage, of the average of the segment rates described in such clause for years in the 25-year period ending with September 30 of the calendar year preceding the calendar year in which the plan year begins, then the segment rate described in such clause with respect to the applicable month shall be equal to the applicable minimum percentage or the applicable maximum percentage of such average, whichever is closest. The Secretary shall determine such average on an annual basis and may prescribe equivalent rates for years in any such 25-year period for which the rates described in any such clause are not available.”
No one reading that would likely figure out the implication (at least without a great deal of effort). However I can give you a real life example….
