Pomeroy Continues Filling Out DB Funding Package
Proposal
August 27, 2009 (PLANSPONSOR.com) - A
long-in-the-making package of pension reform legislation from
U.S. Representative Earl Pomeroy (D-North Dakota) continues
to move toward formal introduction when Congress reconvenes
in September.
Pomeroy on Thursday released the latest version of
the bills collectively designed to help defined benefit
pension plans continue to weather the funding issues
arising out of the economic downturn, according to a news
release from his office. Pomeroy
included suggestions from various interested parties
with whom he consulted after initially releasing the
suggested bills in June 2009 (see
Pomeroy Shares Pension Funding Reform Thoughts
).
The proposals cover both single-employer and
Taft-Hartley plans.
One proposal would allow a DB sponsor to choose one
of two alternative amortization schedules for the
investment losses occurring at the end of 2008: a
nine-year schedule with employers paying interest in the
first two years and a 15-year amortization period that
would "give employers a predictable and practical
required funding stream that would not divert funding
from other key business needs," according to
Pomeroy.
"Last month, employers made an urgent plea for
manageable and predictable pension funding rules as the
nation works it way back to recovery. I heard
valuable suggestions from employers and from employee
organizations in reaction to the earlier outline of this
legislation, and they have been incorporated into the
draft legislative language being released today,"
Pomeroy said in the statement. "Our country is
showing some signs of financial recovery, but exceedingly
large pension costs will hamper both job growth and
capital investment that are needed to grow the
economy. Without help from Congress, many employers
face pension costs that are double, or more, of those in
2008, and face stark choices as a result: freeze pensions
or cut their workforce."
The bill drafts are available
here
.