The analysis, “Did MAP-21 Decrease Pension Contributions?,” examines
the impact the Moving Ahead for Progress in the 21st Century Act (MAP-21)
has had on companies' funding of defined benefit (DB) pension
MAP-21 was enacted in July 2012. One provision of the law
offers pension funding relief to corporate DB plan sponsors by decreasing mandatory tax-deductible minimum required
The analysis indicates that despite the fact companies were not
required to contribute as much to their pension plans as before MAP-21 was
enacted, many made contributions higher than the MRC.
In addition, the analysis finds that despite MAP-21 allowing
them to delay making contributions for several years, many companies did not
exercise this option. This leads the authors of the analysis to believe that
companies have a long-term view of their pension plan’s place within their
organization, as well as a view that funding would ultimately be required.
More specifically, in reviewing pension funding data listed
in companies’ Form 5500 Schedule SB, the authors of the analysis found that 42%
of DB plan sponsors elected to contribute above the “pre-MAP-21” MRC, 23%
contributed well beyond the MRC (at least 20% more) and 35% paid in line with
the MRC or paid no contribution. In addition, the analysis reveals that 31% of
plans had no MRC for 2012, but that 60% of them still chose to fund the plan.
“For our analysis, it is likely that many plan sponsors have
chosen to fund the pension plan, regardless of the impact of MAP-21,” say the
The analysis was written by: James Gannon, director of Asset
Allocation and Risk Management at Russell; Justin Owens, asset allocation
strategist at Russell; and Joshua Barbash, asset allocation strategist at
The full text of the analysis can be found here.