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To: orkrious who wrote (206171)	11/21/2002 9:01:35 PM
From: mishedlo	Read Replies (1) \| Respond to of 436258

Pension obligations. prudentbear.com Reaper, does this make sense? 1% drop yields 8% funding requirement When companies with giant pension plans are figuring plan liabilities, they use an interest rate to discount back future obligations to the present. Guess what? Low interest rates, i.e. low discount rates, make the present value of the obligation larger. So for companies with big pension plans, there is only one thing to do: Lobby! According to BenefitNews, companies are asking lawmakers to change the benchmark from the 30-year Treasury to something with more yield to it. It seems that every 1% drop in the 30-year Treasury rate hikes funding requirements by 8% to 20%. Also, plans with lump benefits are seeing those payouts rise, encouraging cash outs over annuities.