ERIC, Jan 30, 2004

30-Year Treasury Rate v. ERIC Composite Corporate Rate

H.R. 3108 (The Pension Funding Equity Act), currently before Congress, includes a composite corporate bond rate to replace the defunct 30 year Treasury rate for purposes of calculating pension liabilities. The composite rate before Congress is based on the arithmetic average of four conservative bond indexes: Moody's Aa, Lehman Brothers, Merrill +10 and Citigroup.

The following chart compares the current rate of the 30-year Treasury rate with a composite corporate rate consisting of the aforementioned bonds.


January 1, 2004 Valuation
30-Yr Treasury Securities
ERIC Composite
December 2003 Rates
5.07
5.80
100% of 4-Year Weighted Rate
5.25
6.53
105% of 4-Year Weighted Rate
5.51
  
Highest 2004 Quarterly Contributions Interest Rate**
5.81
 

** 105% of January 1, 2003 Current Liability Interest Rate


January 1, 2003 Valuation
30-Yr Treasury Securities
ERIC Composite
December 2002 Rates
4.92
6.23
100% of 4-Year Weighted Rate
5.54
7.06
105% of 4-Year Weighted Rate
5.81
 
120% of 4-Year Weighted Rate
6.65
 

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Click here for the history of the Treasury, PBGC, & Composite Rate