Trade Group: Pension Conference Committee Closing on Final Reform Bill
Dudley told attendees of a Thursday afternoon press conference that the pension committee was edging toward the Senate version of the sweeping reform bill that would allow a 24-month, unweighted smoothing period, rather than the current 48-month allowance.
Dudley warned such a short smoothing period would increase the volatility of a plan and make it more difficult to predict what future costs will be.
The smoothing practice has been controversial because critics complain that it allows ailing plans to mask their true financial picture. One general goal of the pension reform effort has been to provide participants with more detailed and more financial data about their plan’s current health, lawmakers have asserted.
Kent Mason, a partner at Benefits Group of Davis & Harman, said the committee was slanting toward the Senate bill’s three-year suggested period to allow plans to be fully funded, instead of toward the House’s five-year allowance.
Dudley also said the committee was leaning against allowing companies to count credit balances as assets when trying to determine whether a plan is deemed “at risk.”
Conference committee members have been under intense lobbying in recent months by employees and executives of a number of US companies – notably legacy air carriers – who insist they will need a special exemption from the law’s funding deadlines so they can have more time to gather up sufficient assets to meet their plan’s liabilities.
Dudley told reporters that conference committee members also continue to hash out the final details governing the use of cash balance or “hybrid” plans.
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