There was a time when pensions where tied to the 30 year long bond. But that was suspended in 2001. That left companies with a problem. How to determine the health of their (your) pension plans.

Companies are usually obligated to keep these plans at certain levels. Poor planning and inaccurate calculations, coupled with a poor performing market have driven these balances down. This underfunding needs to be added to the plan. Consequently, this looks bad on paper.

Two politicians (Rob Portman R-Ohio and Benjamin J. Cardin D-Maryland) think they might have the answer. These two budding magicians want to change the rate used by these funds, tying them instead to high rated corporate bonds. Doing this lowers the obligations needed to be met to keep the fund fully funded. At least on paper.

This makes little difference if the markets improve or the pensions find a way to recover on their own. But if things do not improve, all this would only make things worse, hiding the problem until, in most cases, it is too large to fix. Companies who have healthy balance sheets would, by paying premiums to the Pension Benefit Guaranty Corporation, a group that, through government sponsorship, guarantees pensions up to certain limits, be left with the bill. Companies pay healthy premiums for this benefit. Those that default on their pensions because of this smoke and mirrors accounting would have their pension problem footed by corporations with sound balance sheets and the soon to be deficit riddled federal government.

The bottom line: companies are not setting aside enough to meet their requirements; valuations are not in line with future obligations; PBGC cannot support poor accounting done now at the expense of future retirees.

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