Pension Investment Implications of Recent Funding Relief Legislation

Moving Ahead for Progress in the 21st Century Act | July 2012

On Friday, July 6th, President Obama signed into law the Moving Ahead for Progress in the 21st Century Act (MAP-21). The legislation includes several provisions affecting pension plans subject to the Pension Protection Act. The main changes to pension rules are on the assumptions for calculating the Target Liability and PBGC premiums, which reduces the required contributions for many plan sponsors, changes their exposure to interest rate risk, and increases the operational costs of running a plan.

This white paper focuses on how the legislative changes affect the risk profiles of plan sponsors, and how those may affect the investment strategies plan sponsors prefer.