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| Re: Is CHIMMY's pension in danger? (1269014) | |||
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Re: Is CHIMMY's pension in danger? |
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Posted by AlM on Sun Mar 1 14:02:57 2015, in response to Re: Is CHIMMY's pension in danger?, posted by ChicagoMotorman on Sun Mar 1 12:30:48 2015. http://www.ctaretirement.org/retirement-plan/reports/2014-actuarial-valuation.pdfAs of 1/1/2014, the CTA pension plan had $1.893 billion in assets. The present value of its liabilities already incurred, using a discount rate of 8.25%, was $3.106 billion. If this were a private company plan, it would have needed to discount liabilities at a rate of about 5.30%, and the present value of the exact same liabilities would have been more than $4 billion. So assets are about half of true liabilities. However, CMM's pension is not at risk. As he says, current employees are contributing 10.125% of pay and the employer is contributing 14.25% of pay. Even under the assumption of 8.25% discount rate, the appropriate rate of contribution to bring the plan to fully funded status in 30 years would be 30% of pay, not 24%. CMM is not going to lose any pension benefits. But taxpayers and remaining employees are paying through the nose to make that happen. And they will have to pay even more in future years. |
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