We take issue with the points raised in the Aug. 20 editorial “A budget gimmick,” regarding “pension smoothing,” which we view as sound policy.

Pension smoothing allows companies to fund pensions using long-term external market conditions and assumptions. Without appropriate smoothing, pension funding is subject to volatility, which can burden sponsors or discourage them from continuing plans. The Federal Reserve has maintained artificially low interest rates, inflating pension liabilities. Companies should not be required to make cash contributions to their pension plans based on inflated and inaccurate pension liability numbers.

Companies have had to choose between capital infusions, hiring and pension funding. Pension smoothing helped them balance these demands by allowing companies to use average bond rates from a longer, more realistic period in measuring their pension liabilities.

The Pension Benefit Guaranty Corp., an independent agency, is funded through company-paid premiums, assets in the pension plans it has taken over and investment income. The PBGC’s most recent annual report shows that its single- employer program is adequately funded to pay benefits for years to come. The PBGC’s finances have improved over the past year as plan sponsors were hit with two unnecessary premium increases.

Scott J. Macey, Washington

The writer is president and chief executive of the ERISA Industry Committee, which advocates about employee benefit plans for employers.