Many union trustees say that even if they had the power, they would not adjust benefits of retirees in pay status.  Others say, don’t give me the power because I might be tempted to use it, or the employer trustees will push me to use it.

Similarly, management trustees say don’t leave benefit cuts up to the Trustees, make the plans make them.  They say this because (a) they don’t belive they could persuade their union counterparts to make necessary changes or (b) they don’t trust their own trustees to vote for hard choices.

In the event of a US downgrade, interest rates will go up.  When they go up, pension liablities might go down.  But then equities might suffer and fixed income too, so no earnings… Well  that is certainly no earnings over a 7 to 7.5% assumed rate.

Many attorneys have advised their fund clients to seek to impose personal liablity on company principals for delinquent contributions.  The theory is that contributions become plan assets when due.  The principal controls what bills are paid. When the principal does not pay the fund, he exercises control over the plan’s assets and should be personally liable.

When I was a full-time delinquency litigator, I looked for an edge like this.  Heck, I even wrote a law review article on it.

But now, I ask these lawyers this question?  How do you report the transaction between the plan and the party-in-interest?  And I ask Trustees, is this the way to attract new employers or retain existing ones?

There was some indication that a portion of the proposed solution – disclosure of meaningless stuff about Trustee structure, demographics and other “qualitative stuff” might be rethunk.  Let’s hope so.  Let’s also hope that the FASB’s thinking will continue to be further informed by employee benefits professionals.  FASB staff optimitically targets late June 2011 for reissuance.  The effective date will be “debated at a later date.”