Benchmark proposal earns harsh criticism

Anand, Vineeta
July 2003
Pensions & Investments;7/21/2003, Vol. 31 Issue 15, p3
Some academics, financial economists and actuaries are against U.S. President George W. Bush administration's proposal to replace the Department of Treasury with an index of high-grade corporate bonds as the benchmark for calculating pension liabilities. The original proposal, the permanent use of a long-term corporate bond index, was opposed by the Treasury Department. Zvi Bodie, the professor of finance in Boston University's management school and a managing director of New York-based Integrated Finance Ltd., proposes requiring companies that invest their pension assets in stocks to pay higher "risk-based" insurance premiums, along the lines of capital adequacy standards used by banking regulators.


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