Question: What is meant by tapping pension fund assets? Why is this action so controversial? MINI CASE Southeast Tile Distributors Inc. is a building tile wholesaler

What is meant by "tapping" pension fund assets? Why is this action so controversial?

MINI CASE

Southeast Tile Distributors Inc. is a building tile wholesaler that originated in Atlanta but is now considering expansion throughout the region to take advantage of continued strong population growth. The company has been a "mom and pop" operation supplemented by part-time workers, so it currently has no corporate retirement plan. However, the firm's owner, Andy Johnson, believes that it will be necessary to start a corporate pension plan to attract the quality employees needed to make the expansion succeed. Andy has asked you, a recent business school graduate who has just joined the firm, to learn all that you can about pension funds, and then prepare a briefing paper on the subject. To help you get started, he sketched out the following questions:

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