Pension funding rule changes enacted by MAP-21 benefited well-funded plans as well as those that were less funded in 2012, according to an analysis released Monday by the Society of Actuaries.
The group looked at whether defined benefit plan sponsors took advantage of the pension funding stabilization provisions of the Moving Ahead for Progress in the 21st Century Act passed in 2012, and how it affected plan funding levels. Plans using MAP-21 to set funding levels were more likely to have larger numbers of participants or a higher proportion of inactive participants, according to the SOA analysis.
MAP-21 changed the three segment rates sponsors use to determine plan liabilities and allowed plans to use a range of rates based on 25-year averaging. Although the new discount rates were aimed at reducing required minimum contributions, SOA officials found that 59% of the plans applying the MAP-21 provisions contributed more than the required amounts.
The analysis was based on 2012 regulatory filings. SOA officials will continue studying MAP-21 provisions as they are applied in 2013. “With the availability of more data about contribution experience, there may be more understanding of how the stabilization provisions affected plan funding,” said Joseph Silvestri, retirement research actuary for the Society of Actuaries, in a statement.