Reply #4: That should be one problem that fixes itself. [View All]

The real "underfunding" problem in pensions is due to such low interest rates. The amount a company needs to have in their pension fund is based on future benefit calculations and current interest rates. When rates are low (especially when they are substantially lower than you expect them to be over the next 30 years) a company needs an outrageous pension fund to say they are "fully funded".

Keep in mind this ignores how the money is ACTUALLY invested. They could be fine by any reasonable calculation, but because they need to use the government mandates rate they are "underfunded".

As rates climb back up (but future pension liabilities hardly change), most companies will climb back to "fully funded". If we see really high inflation rates it will actually improve that situation (but everything else may go in the crapper).