The Other US Deficit
Paula L. Green

Global Finance
April 2004

In The Other US Deficit, Paula Green accepts the common wisdom that money that goes to fund pension plans cannot be used for other corporate purposes such as "paying dividends to investors, improving compensation for existing employees, hiring new workers, investing in new businesses and paying down debt."

This competition for corporate resources within one firm should not, however, be viewed as a drag on the overall economy. As we outline in our April 21, 2004 commentary, funding pension plans is not tantamount to "throwing money down a rathole." Pension funding is one of the ways in which valuable investment capital is made available to the economy's most promising business opportunities.

Pension Finance Institute
May 1, 2004

The Pension Finance Institute provides policymakers, plan sponsors, participants, journalists, investors and others with pertinent information and objective analyses regarding the costs, risks and social advantages of U.S. defined benefit pension plans. The Institute, reflecting the principles of modern finance, addresses pension funding, investment, accounting, plan design, standard actuarial practices and the role of the PBGC.