Pension Reform Assessment

Economic Realities of the 2000's The previous benefit design was very back-loaded, which lead to a high ratio of liability to payroll (or employer budget) as the plan matured • Active headcount had contracted heavily, at least partially due to the previous pension and healthcare reforms, which exacerbated the issue Thus, when the dot.com bubble was followed by the Great Recession, the funding levels of the pension trusts deteriorated to dangerously low levels 78% of the liability was in the retirees and actives already eligible to retire, meaning most of the benefit payouts were going to happen over the next 10-15 years and was putting strain on the cash flow - GRS This limited the ability to use re-amortization alone 3

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