Objections Lifted for Senate Pension Reform

November 11, 2005 (PLANSPONSOR.com) - Pension reform may actually reach the Senate floor now that Senators Mike DeWine (R-Ohio) and Barbara Mikulski (D-Maryland) have lifted their procedural objections to the Senate's pension legislation.

However, Reuters reports that an amendment allowing airlines 20 years to make up for underfunding of their pension plans may be offered up, which could cause some fresh objections.   The bill currently allows for bankrupt airlines to take up to 14 years to make up their shortfalls; the airlines had asked for 25 (See  Airline Pension Conflict Stalls Senate Reform Bill ).   All other companies would be allowed seven years to fix their pension plans.

The bill was stalled after manufacturers and labor unions complained about the bill’s provision requiring companies in poorer financial health to pay higher premiums to the Pension Benefit Guaranty Corporation (PBGC) (See  Senate Pension Proposal Still on “Hold” ).

DeWine said he had been promised he would be a member of the “conference committee” that would handle negotiations on the legislation between the House and the Senate, giving him another opportunity to change the bill, according to Reuters.

The House’s pension reform bill has passed two key committees.   The House bill does not require higher premiums for financially distressed companies and also does not give special provisions for bankrupt airlines.

A Senate aide told Reuters that the amendment allowing airlines 20 years to make up underfunding also would require them to work out a plan with the PBGC to avoid termination, if, after taking advantage of this relief, they tried to terminate their pension plan anyway.