AFN Pension Assets
Information Timelier
The value of the NRLN’s work with the U.S. Senate’s Committee on Help, Labor, Education and Pensions (HELP) in 2022 appears this year in the Annual Funding Notice being sent to pension plan beneficiaries.
The NRLN worked with the committee staff of Washington Senator Patty Murray, at that time Chair of the Committee on HELP. The NRLN’s proposal on making AFN information clearer and timelier was in a bill introduced by Senator Murray and later incorporated with another Senate pension bill. The Senate passed the pension legislation as part of the omnibus appropriations bill. The House also passed pension legislation. Together, the 2022 major pension legislation is known as Secure 2.0.
Before the 2022 legislation, pensioners received an AFN which failed to provide a clear picture of how well or poorly a pension plan was funded. This was because by the time beneficiaries received an AFN in April, the assets data had been calculated 16 months earlier. The NRLN’s common sense proposal included in the legislation was to use year-end valuation so when retirees receive their AFN the data on pension plan assets is only four months old.
Pension plan sponsors were given time to implement the change required by Secure 2.0. The AFNs that pension plan beneficiaries have received in 2026 or will receive in the coming weeks will show a pension plan’s assets at fair market value as of December 31, 2025, rather than calculations from January 1, 2025.
In addition, the adopted NRLN’s AFN proposal earlier simplified the document by moving all relevant data to a table on the front page. The table shows current and past two years of plan participants; plan assets and liabilities; company funding obligations and contributions; interest rates used to calculate funding levels, and rate of return on plan investments over a three-year period.
Pension plan sponsors are continuing to eliminate their pension plan responsibilities by purchasing annuities from insurance companies. This transfers responsibility for execution of the pension payments to an insurance company and “de-risking” the company’s responsibilities.
The NRLN is working with committee staff members on Capitol Hill with an eye toward the 2027 congressional legislative session when there is the potential for a Secure 3.0. We are advocating that an annuity contract should include full reinsurance of the monthly benefit itself. We maintain only a group annuity contract that requires independent, third-party reinsurance by a highly rated insurance company can reliably replace the Pension Benefits Guarantee Corporations’ (PBGC’s) protections for pension plan participants.
Bill Kadereit,President
National Retiree Legislative Network
