Corridor Rule

  

Categories: Financial Theory

The corridor rule is used in reporting to make sure that a company’s ability to pay yearly pensions doesn’t cause its stock to plummet. The rule states that a company must report if the pensions it pays out have surpassed a gain or loss of 10% of what it needs to fulfill those pensions.

If that happens, the corridor rule says the gain or loss can be built into the income statement over time rather than all at once, so that the company’s numbers are not affected so much so that there is a change in stock price.

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another state employees pension that's backed up by a state that's going

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bankrupt. Hi, California, Hi Illinois. well we're looking at you. all right people

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a pension is that the employer essentially forces you to put away money

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how nice. or at least be sure you invest it well on a salary of 75 grand a state [gambling table shown]

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employed ditch-digger might get a contribution of say 10 grand a year into

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her pension, and that's each year 10 grand of forced savings for as long as

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she you know digs ditches for the state. and in some states where the unions are

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strong in the governing financial knowledge is weak the government

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year return on their invested pension savings. if the invested return like [equation]

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