Washington Post Publishes Letter from ERIC on Pension Smoothing

The Washington Post recently published a letter from the ERISA Industry Committee (ERIC) on pension smoothing in its Letters to the Editor section. The commentary, "‘Pension smoothing’ allows companies to follow the economic environment", explains that ERIC takes issue with the characterization of pension smoothing as a “budget gimmick”.

ERIC stated that “Pension smoothing allows companies to fund pensions using long-term external market conditions and assumptions.” The letter explained that pension funding is subject to volatility and can discourage companies from continuing to sponsor plans. 

ERIC notes that the Federal Reserve has maintained artificially low interest rates, which have inflated pension liabilities and indicates that companies should not be required to make contributions based on inflated amounts.

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