Term
| Contrast the balance sheet of depository institutions with those of life insurance firms. |
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Definition
| 2. A major similarity between depository institutions and insurance firms is the high degree of financial leverage incurred by both groups of firms. Both groups solicit funds (from policyholders or depositors) and use them to finance an asset portfolio predominately consisting of debt securities. A major difference between them is their composition of the liabilities, which is fixed for depository institutions but stochastic for insurance firms. While the face value of bank deposits is fixed, the insurance company's net policy reserves depend on expected future required payouts which can be highly uncertain. The other difference is that insurance companies are allowed to invest in equity instruments, which currently are prohibited for depository institutions. |
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Term
| How has the composition of the assets of U.S. life insurance companies changed over time? |
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Definition
| 3. We can see in Table 15-1 that since the 1920s and 30s, life insurance companies have increased their holdings of bonds and stocks and decreased their holdings of mortgage loans and policy loans. Government securities comprise the next largest component and have recently increased back to their earlier levels after reaching very low levels in the 60s and 70s. |
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Term
| What are the similarities and differences among the four basic lines of life insurance products? |
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Definition
| 4. The four basic lines of life insurance products are: (1) ordinary life; (2) group life; (3) industrial life; and (4) credit life. Ordinary life is sold on an individual basis and represents the largest segment of the life insurance market. The insurance policy can be structured as pure life insurance (term life) or may contain a savings component (whole life or universal life). Group policies are similar to ordinary life insurance policies except that they are centrally administered, providing cost economies in evaluating, screening, selling, and servicing the policies. Industrial life has largely been replaced by group life since cost economies have made group life more affordable. Industrial life was historically marketed to individuals who would make small, very frequent payments and would require personal collection services. Credit life typically is term life sold in conjunction with some debt contract. |
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Term
| Explain how annuities represent the reverse of life insurance activities. |
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Definition
| 5. A typical life insurance contract requires a periodic payment by one party for a promised payment of either a lump sum or an annuity if a particular event occurs, such as death or an accident. An annuity represents a reverse contract where the party invests money to liquidate a fund, that is, to receive periodic payments depending on the market conditions. It may be initiated by investing a lump sum or making periodic payments before the annuity payments are begun. |
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Term
| How can you use life insurance and annuity products to create a steady stream of cash disbursements and payments so as to avoid either the payment or receipt of a single lump sum chash amount? |
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Definition
| 6. A life insurance policy (whole life or universal life) requires regular premium payments which then entitle the beneficiary to a single lump sum. Upon receipt of such a lump sum, a single annuity could be obtained which would generate regular cash payments until the value of the insurance policy is depleted. |
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Term
| If an insurance company decides to offer a corporate customer a private pension fund, how would this change the balance sheet of the insurance company? |
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Definition
| 7. The pension fund constitutes a liability for the insurance company since it would now be obligated to pay the pensioners of the fund according to some agreed upon contract. It would be shown on the right hand side of the balance sheet in the form of reserves or a guaranteed investment contract (GIC). The money paid into the fund by the company and/or its employees would be invested by the insurance company, thus affecting the amount and composition of the assets. |
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Term
| How does the regulation of insurance companies compare with that of depository institutions? |
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Definition
| 8. Insurance companies are more exclusively subject to state regulations compared to banks and thrifts. Although there are national insurance organizations such as the National Association of Insurance Commissioners, the companies themselves are regulated by the state agencies. Banks and thrifts are typically subject to both national and state oversight. While both banks and insurance companies receive regulatory scrutiny as to the quality of their assets and liabilities, bank regulations also dictate minimum reserve and capital requirements. Banks have more geographic restrictions. Both insurance companies and banks are limited in the products that they can offer, although recent regulations (such as the Financial Services Modernization Act of 1999) are change this mix. |
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Term
| Calculate the annual cash flows (annuity payments) from a fixed-payment annuity if the present value of the 20-year annuity is $1 million and the annuity earns a guaranteed annual return of 10 percent. The payments are to begin at the end of the current y |
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Definition
PV=$1,000,000
N=20
I=10
PMT=?$117,459.62 |
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Term
| Calculate the annual cash flows (annuity payments) from a fixed-payment annuity if the present value of the 20-year annuity is $1 million and the annuity earns a guaranteed annual return of 10 percent. The payments are to begin at the end of five years. |
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Definition
$1,000,000x(1.10)^5=$1,610,510
PV=1,610,510
N=20
I=10
PMT=?189,169.90 |
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Term
| You deposit $10,000 annually into a life insurance fund for the next 10 years, at which time you plan to retire. Instead of a lump sum, you wish to receive annuities for the next 20 years. What is the annual payment you expect to receive beginning in year |
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Definition
PMT=$10,000
I=8
N=10
FV=?-144,865.62
PV=144,865.62
I=8
N=20
PMT=-14,754.88 |
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Term
| Suppose a 65-year-old person wanted to purchase an annuity from an insurance company that would pay $20,000 until the end of that person's life. The insurance company expected that this person would live for 15 more years and it would be willing to pay 6 |
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Definition
1ST PERSON
PMT=$20,000
I=6
N=15
PV=-194,245
2ND PERSON
PMT=$20,000
I=6
N=20
PV=?-229,398 |
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Term
| How do life insurance companies earn profits? How does investment in junk bonds increase their returns and what are the drawbacks? |
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Definition
| 12. Insurance firms earn profits by taking in more premium income than they pay out in policy payments. Firms can increase their spread between premium income and policy payout in two ways. One way is to decrease future required payouts for any given level of premium payments. This can be accomplished by reducing the risk of the insured pool (provided the policyholders do not demand premium rebates that fully reflect lower expected future payouts). The other way is to increase the profitability of interest income on net policy reserves. Since insurance liabilities typically are long term, the insurance company has long periods of time to invest premium payments in interest earning asset portfolios. The higher the yield on the insurance company's investments, the greater the policy payout (in the case of variable life insurance) and the greater the insurance company's profitability. Since junk bonds offer high yields, they offer insurance companies an opportunity to increase the return on their asset portfolio. However, junk bonds are much more risky and as result of the recent failures of some life insurance firms, the NAIC’s proposed laws limiting insurance company holdings of junk bonds in their asset portfolios. |
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Term
| How have the product lines based on net premiums written by insurance companies changed over time. |
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Definition
| 13. Since 1960 the biggest decreases have been in the fire, accident and health, and allied categories, while the multiple peril policies have shown the biggest increases. The changes are related in that much change in the number of policies that have decreased can be attributed to the subsuming of these policies into the multiple peril policies. |
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Term
| What are the two major lines of property-casualty(P&C) insurance firms? |
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Definition
| 14. The two major lines of property-casualty insurance are property insurance (insurance compensating the insured, fully or partially, for personal or commercial property damage as a result of accidents and other events) and liability insurance (insurance compensating a third party, fully or partially, because its personal or commercial property was damaged as a result of the accidental actions of the insured).In many cases, property and liability insurances are sold together, such as personal or commercial multiple peril and auto insurance. Fire and allied lines usually are sold as property insurance only. Liability insurance is sold separately for coverages such as malpractice or product liability hazards. In addition, reinsurance provides a means for primary insurers to pool their risk by transferring some of the risk and premium to a reinsurer. |
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Term
| What are the three sources of underwriting risk in the P&C industry? |
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Definition
| 15. The three sources of underwriting risk in the PC industry are: (a) unexpected increases in loss rates, (b) unexpected increases in expenses, and (c) unexpected decreases in investment yields. Loss rates are influenced by whether the product lines are property or liability (with the latter being less predictable), whether they are low-severity high- frequency lines or high-severity low-frequency lines (with the latter being more difficult to estimate), and whether they are long-tail or short-tail lines (with the former being more difficult to estimate). Loss rates also are affected by product inflation and social inflation. Unexpected increases in expenses are a result of increases in commission costs to brokers, general expenses, taxes and other expenses related to acquisitions. Finally, investment yields depend on the stock and bond markets as well as on the asset allocations of the portfolios. |
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Term
| How do increases in unexpected inflation affect P&C insurers? |
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Definition
| 16. Generally, the effect is an adverse one, particularly if the policy is written in terms of the replacement cost of the asset and the premiums paid are not adjusted for inflation. Moreover, the investment value of the assets of insurers, particularly bonds and other fixed rate securities, are likely to be fall in value from unexpected inflation. |
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Term
| If the simple loss ratio on a line of property insurance is 73 percent, the loss adjustment expense is 12.5 percent, and the ratio of commissions and other acquistions expenses is 18 percent, is this line profitable? |
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Definition
| a. No, because the combined ratio is 73% + 12.5% + 18% = 103.5 |
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Term
| How does your answer to part (a) chang eif investment yields of 8% are added? |
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Definition
| b. Yes, because the combined ratio adjusted for investment yield is 103.5% - 8% = 95.5%. |
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Term
| An insurance company's projected loss ratio is 77.5 percent and its loss adjustment expense ratio is 12.9%. It estimates that commission payments and dividends to policyholders will add another 16%. What is the minimum yield on investmens required in orde |
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Definition
18. Combined ratio = 77.5% + 12.9% + 16.0% = 106.40%.
In order to be profitable, the yields on investments have to be greater than 6.40%. |
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Term
Which of the insurance lines listed below will be charged a higher premium by insurance companies and why?
A)Low severity, high frequency lines versus high severity, low frequencey lines.
b) long-tail versus short-tail lines |
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Definition
19. Insurance companies have a more difficult time predicting the severity of losses for high- severity low-frequency lines of business, such as earthquakes and hurricanes. In addition, these catastrophic events cause severe damage, meaning the individual risks in the insured pool are not independent. As a result, premiums for high-severity low-frequency lines will be charged higher premiums than low-severity high-frequency lines.
Similarly, long-tail lines of businesses are harder to predict than short-tail lines because claims can be made years after the premiums have been made. Thus, premiums in this category of business will be higher. Modern day examples of such lines include coverage for product liabilities, such as exposure to asbestos or chemicals like agent orange. |
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Term
| An insurance company collected $3.6 million in premiums and disbursed $1.96 million in losses. Loss adjustment expenses amounted to 6.6% and dividends paid to policyholders totaled 1.2%. The total income generated from their investments was $170,000 after |
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Definition
20. Pure loss = $3.6 million - $1.96 million = $1.64 million
Expenses = 0.066 x $3,600,000 = $237,600
Dividends = 0.012 x $3,600,000 = $43,200
Investment returns = $170,000
Net profits = 1,640,000-237,600-43,200+170,000 = $1,529,200 |
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Term
| What are the three tpes of finance companies and how do they differ from commercial banks? |
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Definition
1) sales finance institutions
2)personal credit institutions
3)business credit institutions
Finance companies differ from commericial banks in that they rely on shor and long term borrowing, such as commercial paper and bonds instead of depostis. Thei assets consist mainly of business and consumer loans, usually short term. They are less regulated and as a result also tend to hold more equity to assets to signal their solvency because they are heavy borrowers in the credit markets |
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Term
| Why do you think finance companies have been among the fastest growing FI groups in recent years? |
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Definition
| 2. Finance companies specialize in providing credit to specific markets and, as such, they have developed an expertise in credit assessment and management in these market niches. Moreover, regulation is less stringent for finance companies than for their bank competitors, thereby lowering operating costs. Finally, finance companies affiliated with highly rated corporations have been able to raise funds at lower rates than their financially shaky bank competitors. |
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Term
| What are the three types of lending services offered by finance companies? |
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Definition
| 3. Consumer lending, business lending, and mortgage financing. |
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Term
| Compare Tables 16-7 and 17-1. Which firms have higher capital ratios (as a percentage of total assets), securities firms or finance companies? What does this indicate about the relative strengths of thse two firms? |
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Definition
| 4. For securities firms, equity capital as a proportion of total assets in 2001 was 4.28%. For finance companies, the total capital ratio was 13.6%. The higher ratio for finance companies can be explained by the fact that they are active borrowers in the capital markets. As a result, they need to keep a larger amount of capital, to serving both as a cushion for their own solvency and as a possible signal to the markets. |
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Term
| How does the amount of equity as a percentage of assets compare for finance companies and commercial banks? What accounts for the difference? |
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Definition
| 5. A comparison of Table 17-1 with Table 11-2 show that finance companies hold relatively more equity, 13.6% for finance companies and 9.1% for commercial banks. The difference is most likely attributable to the debt of commercial banks being insured, usually by the FDIC. This insurance make the debt safer from the depositors' and stockholders' perspective. This allows the commercial bank to take on more debt than the uninsured finance company. |
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Term
| What are the major assets and liabilities held by finance companies? |
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Definition
6. Business and consumer loans (called accounts receivable) are the major assets held by finance companies; in 2001 they represented 56.7 percent of total assets. In 2001, consumer loans constituted 41.16 percent of all finance company loans, mortgages represented 16840 percent, and business loans composed, 42.00 percent.
In 2001 commercial paper amounted to $157.3 billion (11.3 percent of total assets); other debt (due to parents and not elsewhere classified) totaled $663.6 billion (47.8 percent of total assets). Total capital comprised $189.1 billion (13.6 percent of total assets), and bank loans totaled $49.4 billion (3.5 percent of total assets). |
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Term
| What has been the fastest growing area of asset business for finance companies? |
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Definition
| 7. According to Table 17-4, nonconsumer finance areas, especially, equipment leases and loans as well as real estate loans. |
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Term
| Why was the reported rate on motor vehicle loans historically higher for a finance company than a commercial bank? Why did this change in 1997? |
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Definition
| 8. Presumably because finance companies generally attract a riskier class of customers than do banks. In the late 1990s, however, economic problems in emerging market countries resulted in unusually low car sales in the U.S. As an incentive to clear the expanding stock of new cars, auto finance companies owned by the major auto manufacturers slashed interest rates on new car loans. |
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Term
| What advantages do finance companies have over banks in offering services to small-business customers? |
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Definition
| 9. First, finance companies are not subject to regulations that restrict the types of products and services they can offer. Second, they have no regulators monitoring them since they do not accept deposits. Third, since they are usually subsidiaries of industrial companies, they are likely to have more product expertise. Fourth, they are more willing to take on risky customers. Finally, finance companies have lower overhead than banks. |
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Term
| Why are finance companies less regulated than commercial banks? |
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Definition
| 10. Because they do not accept deposits the way commercial banks do. |
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Term
| Why have finance companies begun to offer more mortgage and home equity loans? |
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Definition
| 11. Since the Tax Reform Act of 1986, only home equity loans offer tax deductible interest for the borrower. Hence these types of loans are much more popular than those without a tax deduction. The increased demand for these types of loans have attracted the finance companies into this product line. |
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Term
| What is a wholesale motor vehicle loan? |
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Definition
12. A wholesale loan is a loan to a company used to finance business with its
suppliers as opposed to a retail loan that finances a transaction between a company and a consumer. |
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Term
| Describe the difference between a private pension fund and a public pension fund. |
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Definition
| 1. Private pension funds are created by the private entities (e.g., manufacturing, mining, or transportation firms) and are administered by private corporations (financial institutions). Public pension funds are those funds administered by a federal, state, or local government (e.g., Social Security). |
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Term
| Describe the difference between an insured pension fund and a noninsured pension fund. What type of financial institutions would administer each of these? |
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Definition
| 2. Pension plans administered by life insurance companies (about 25 percent of the industry’s assets) are termed insured pension plans. The distinction is due not necessarily to the type of administrator, but to the classification of assets in which pension fund contributions are invested. Specifically, there is no separate pool of assets. Rather the funds are invested in the general asset accounts of the insurance company. The portion of the insurance company’s assets devoted to the pension fund are reported in the liability section under pension reserves. Noninsured pension plans (administered by mutual funds and other financial institutions) are managed by a trustee appointed by the sponsoring business, participant, or union. Trustees invest the contributions and pay the retirement benefits in accordance with the terms of the pension plan. |
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Term
| Describe the difference between a defined benefit pension fund and a defined contribution pension fund. |
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Definition
3. In a defined benefit pension plan, the employer (or plan sponsor) agrees to provide the employee a specific cash benefit upon retirement, based on a formula that considers such factors as years of employment and salary during employment. The formula is generally one of three types: flat-benefit, career-average, or final-pay formula.
With a defined contribution pension plan the employer (or plan sponsor) does not commit to provide a specified retirement income. Rather, the employer contributes a specified amount to the pension fund during the employee’s working years. The final retirement benefit is then based on the total employer contributions, any additional employee contributions, and any investment gains or losses. |
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Term
| What are the three types of formulas used to determine pension benefits for defined benefit pension funds? Describe each. |
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Definition
| 4. The three types of formulas used to determine pension benefits for defined benefit pension funds are flat-benefit formula, career-average formula, and final-pay formula. A flat benefit formula pays a flat amount for every year of employment. Two variations of career-average formulas exist; both base retirement benefits on the average salary over the entire period of employment. Under one formula retirees earn benefits based on a percentage of their average salary during the entire period they belonged to the pension plan. Under the alternate formula, the retirement benefit is equal to a percentage of the average salary times the number of years employed. A final-pay formula pays a retirement benefit based on a percentage of the average salary during a specified number of years at the end of the employee’s career times the number of years of service. |
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Term
| Your employer uses a flat benefit formula to determine retirement payments to its employees. The fund pays an annual benefit of $2,500 per year of service. Calculate your annual benefit payments for 25, 28, and 30 years of service. |
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Definition
25x2500=62,500
28x2500=70,000
30x2500=75,000 |
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Term
| Your employer uses a career average formula to determine retirement payments to its employees. The annual retirement payout is 5% of the employees' career average salary times the number of years of service. Calculate your annual benefit payment under the |
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Definition
60,000x.05x30=90,000
62,500x.05x33=103,125
64,000x.05x35=112,000 |
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Term
| Your employer uses a final pay formula to determine retirement payouts to its employees. The annual payout is 3% of the average salary over the employees' last three years of service times the total years employed. Calculate your annual benefit under the |
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Definition
40,000x.03x17=20,400
47,000x.03x20=28,200
50,000x.03x22=33,000 |
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Term
| Waht have the trends been for assets invested, number of funds, and number of participants in defined benefit versus defined contribution pension funds in the last two decades? |
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Definition
8. Defined contribution plans are increasingly dominating the private pension fund market. Indeed, many defined benefit funds are converting to defined contribution funds. Figures 19-1,
19-2, and 19-3 show pension fund assets, the number of pension plans, and the number of pension plan participants, respectively. In all three figures defined contribution plans are increasing in importance relative to defined benefit plans. Table 19-3 shows the net acquisition of financial assets in defined benefit and defined contribution plans from 1987 through 1998. In four of the years defined benefit plans actually experienced a reduction in assets held, while the industry as whole was growing at an average rate of over 10 percent. One reason for this shift is that defined contribution funds do not require the employer to guarantee retirement benefits and thus managers do not need to monitor the funds performance once the required contribution are made. Thus, employees must bare more of the responsibility for monitoring fund performance. |
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Term
| Describe the trend in assets invested in 401k plans in the 1990s and early 2000s. |
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Definition
| 9. Figure 19-4 shows the growth in 401(k) plans in the 1990s: from $385 billion in 1990 to $1,068 billion in 1997. In 1998 there were over 300,000 401(k) plans and over 37 million participants. In 2001 there were over 42 million participants in these plans. |
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Term
| Your company sponsors a 401k plan into which you deposit 12% of your $60,000 salary. Your Co. matches 50% of the first 5% of your contributions. You expect the fund to yield 10% next year. If you are currently in the 31% tax bracket, what is your annual i |
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Definition
$60,000x.12=$7,200
$7,200x.31=$2,232
Employees cost =(7,200-2,232)=$4,968
Employer match= $60,000x.5x.05=$1,500
Total year 1 investment at year start=($7,200+$1,500)=$8,700
Your 1 year return is ($8,700x.10)=$870
Total 401k investment @ year end=($8,700+$870)=$9,570
Employees 1 yr return=
($9,570-$4,968)/$4,968=92.63% |
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Term
| Using the info from Question 10, and assuming all variables remain constnat over the next 25 years, what will your 401k fund value be in 25 yrs (wehn you expect to retire? |
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Definition
PMT=(60,000X.12)+(60,000X.50X.05)=$8700
I=10
N=25
FV=?855,619 |
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Term
| What is the difference between an IRA and a Keogh account? |
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Definition
| 12. Individual retirement accounts are self-directed retirement accounts set up by employees who are also covered by employer sponsored pension plans. Contributions to IRAs are made strictly by the employee. A Keogh account is retirement account available to self-employed individuals. Contributions by the individual may be deposited in tax deferred accounts administered by a life insurance company, a bank, or other financial institution. Similar to 401(k) plans the participant in a Keogh account is given some discretion in how the funds are invested. |
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Term
| Describe the "pay as you go" funding method that is used by many federal and sate or local government pension funds. What is the problem with this method that may damage the long term viability of such funds? |
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Definition
| 13. Most state and local government pension funds are funded on a “pay as you go” basis, meaning that contributions collected from current employee’s are the source of payments to the current retirees. As result of the increasing number of retirees relative to workers, some of these pension funds (e.g., New York City) have experienced a situation in which contributions have not been high enough to cover the increases in required benefit payments (or the pension funds are underfunded). |
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Term
| Describe the differnet pension funds sponsord by the federal government. |
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Definition
| 14. Civil service funds cover all federal employees who are not members of the armed forces. This group is not covered by Social Security. Similar to private pension funds the federal government is the main contributor to the fund, but participants may contribute as well. In addition to Social Security, career military personnel receive retirements benefits from a federal government-sponsored military pension fund. Contributions to the fund are made by the federal government and participants are eligible for benefits after 20 years of military service. Employees of the nation’s railroad system are eligible to participate in federal railroad pension system. Originated in the 1930s, contributions are made by railroad employers, employees, and the federal government. The largest federal government pension fund is Social Security. Also known as the Old age and Survivors Insurance Fund, Social Security provides retirement benefits to almost all employees in the U.S. Social Security was established in 1935 with the objective of providing minimum retirement income security to all retirees. |
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Term
| What are the major assets held by private pension funds in 1975 versus 2002? Explain the differences. |
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Definition
| 15. Financial assets held by pension funds totaled $244.3 billion in 1975 and $4,183.4 billion in 2002 (a 1,612 percent increase in 27 years). In 2002 61.62 percent of pension fund contributions were in corporate equities or mutual funds shares. This compares to 44.61 percent in 1975. In fact, pension funds are the largest institutional investor in the stock market. In comparison, credit market instruments and loans were the major assets in 1975; 45.57 percent of financial assets versus 26.70 percent in 2002. Certainly the booming stock markets of the 1990s are one reason for the switch to equities. |
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Term
| How do the financial asset holdings of defined benefit pension funds differ from those of defined contribution pension funds differ from those of defined contibution pension funds? Explain the differences. |
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Definition
16. Figure 19-5 shows the distinction in private pension plan financial asset investments for defined benefit and defined contribution plans. Defined benefit plans have 26.83 percent of their funds invested in U.S. governments securities and bonds compared to defined contributions plans with 8.52 percent. Also, defined benefit plans have 47.43 percent of their assets invested in corporate equities compared to 44.78 percent for defined contribution plans. In contrast, defined contribution plans have 22.76 percent of their funds invested in mutual fund shares compared to 5.92 percent for defined benefit plans.
Defined benefit pension plans offer employees a promised payout, while defined contribution plans do not. The promise of guaranteed retirement payments is likely a major reason for the larger percentage of investments in fixed payout securities by defined benefit plans. Defined contribution plans do not offer a guaranteed retirement payout. Thus, administrators invest more of the funds in risky equities and mutual fund shares. |
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Term
| What was the motivatin for the passage of ERISA? |
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Definition
| 17. ERISA was passed when many workers who had contributed to pension funds for years were failing to receive their pension benefits. ERISA charged the Department of Labor with the job of overseeing pension funds. |
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Term
| Describe the major features of ERISA |
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Definition
18. The principal features of ERISA involve funding, vesting of benefits, fiduciary responsibility, transferability, and insurance.
Funding: Prior to ERISA there were no statutory requirements forcing defined fund benefit administrators to adequately fund their plans. ERISA established guidelines for funding and set penalties for fund deficiencies.
Vesting of Benefits: Frequently, while employers start contributing to an employee’s pension fund as soon as the employee is eligible to participate, benefits may not be paid to the employee until he or she has worked for the employer for a stated period of time (or until the employee is vested). ERISA requires that the plan must have minimum vesting requirements and set a maximum vesting period of ten years.
Fiduciary Responsibilities: A pension plan fiduciary is a trustee or investment advisor charged with the management of the pension plan. ERISA set standards governing the management of a pension plan. Specifically, ERISA required that pension plan contributions be invested with the same diligence, skill, and prudence as a prudent person in like circumstances (the so-called prudent-man rule). Plan assets are required to be managed with the sole objective of providing the promised benefits to participants. To ensure a fund operates in this manner ERISA increased the requirement for pension plans to report on the current status of investments in the pension plan.
Transferability: ERISA allowed employees to transfer pension credits from one employer plan to another when switching jobs.
Insurance: ERISA established the Pension Benefit Guarantee Corporation (PBGC), an insurance fund for pension plan participants similar to the FDIC. The PBGC insures participants of defined benefit plans if the proceeds from the plan are unable to meet its promised pension obligations. |
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