overfunding

WHEN IT WORKS People who want to use permanent life insurance policies to build wealth do so by paying more than the premium, a practice known as overfunding.

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To take advantage of the low yields on U.K. government debt, the state's Debt Management Office has recently sold bonds exceeding current needs, thereby "overfunding" the government's cash requirement.

Money, Not Credit, Is the Issue

A host of mistakes and surprises undermined the schemes: the restrictions on alleged "overfunding" introduced by Lord Nigel Lawson; tighter regulation, in response to injustices and scandals; errors by actuaries in forecasting life expectancy and prospective returns at the peak of the stock market bubble; and declining interest rates."

Gordon Brown Admits He Was Wrong...Sort Of

And if the plan does well, you might not be able to make as big a contribution as you planned to prevent overfunding the plan, which could trigger tax penalties, says Rita Kalra of Benefit Consulting Group in Newport Beach, Calif., which sets up and administers private-pension plans.

Taking Your Pension Private

It tells companies with overfunded pension plans that they can take every dollar of overfunding out the plans, and it tells companies with underfunded plans that it will bail them out.

Pension Guarantee Hazards, Arnold Kling | EconLog | Library of Economics and Liberty

Other economists say using a so-called risk-free rate would result in an overfunding of retirement systems because their often stock-heavy investments are likely to earn more than Treasurys.

Public Pension-Fund Squeeze

Excess cash can goad chief executives into making impulsive acquisitions at high prices, splurging on palatial headquarters or overfunding underwhelming projects.

Why You Should Get a Bigger Slice of Earnings

Milliman Inc., a pension consultant, said the largest 100 U.S. defined benefit plans swung from an average overfunding of 4.9% at the end of 2007 to being underfunded by 22.8% by the end of last year.

GM to Drop Name From Asset-Management Arm

GM last month said its U.S. pension commitments for hourly and salaried employees are underfunded by $12.4 billion, a reversal from an overfunding of $18.8 billion a year earlier.

GM to Drop Name From Asset-Management Arm

This is also often paired with the inevitable complaints of program "underfunding" - oddly enough never matched by complaints from any quarter that any program is experiencing "overfunding".

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