Let’s keep it really, really simple
Have the MEC publish the actual year-by-year returns they used in the “modeler”
Name & return of each index, and the assumed allocation.
(They videos allude to the S&P 500, but not to the specific fixed income index. The videos allude to a 50/50 allocation, but please just show us the #s used)
With all that, we can examine how and why this “Variable Plan” is better....or worse.
Certainly using “career average earnings” vs “high 5” yields a lower accrued earned benefit
This is a “classic move” right out of many companies play books as they involuntarily shifted employees the new retirement plans over the past 20 years
But we are proposing this change ourselves!?!?
Of course, once we know the indexes and allocations, we should examine “future, forecast returns” in those indexes, not focus on “historical returns”
I would trust Vanguard’s projections....and have in fact posted links to those projections in other threads
One of the main reasons companies have punted their DB plan’s was because their forecast returns were “too optimistic”.
Let’s not accept a plan that uses a lower/slower yielding earned accrual method, then assumes market returns, above a given hurdle rate, will make up that deficit