X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
The Senate overwhelmingly passed a pension reform bill Thursday that offers special relief to the bankruptcy-prone airline and steel industries. In a 78-19 vote, senators overcame months of partisan bickering about the measure, which would save companies $80 billion in pension payments over the next two years. The House already had passed the bill, and President Bush is expected to sign it by early this week. Lawmakers had been fighting an April 15 deadline for action on the bill because that is when employers must make their quarterly pension contributions. “I’m relieved that we got this bill done,” Senate Finance Committee Chairman Charles Grassley, R-Iowa, said shortly after the vote. “Workers need reliable funding of their pensions, and employers need a reliable basis on which to calculate pension payments.” The Senate action drew praise from the business community, which has pushed hard for the legislation. “President Bush’s signature on this bill will allow companies to put more money into new business investments, creating new jobs and new opportunities,” said U.S. Chamber of Commerce executive vice president R. Bruce Josten. “Putting more corporate funds behind the economic recovery already under way instead of making excessive pension contributions is a win-win for workers and the economy.” While the legislation offers relief to all corporations with pension plans, it includes special provisions for airlines and steel companies, many of which are facing pension funding shortfalls. Rather than having to make up those deficits immediately, the legislation lets airlines and steel companies pay in the first year only 20 percent of catch-up payments, which are known as deficit reduction contributions. These payments become mandatory when company pension coffers fall below 90 percent of required levels. The companies would pay 40 percent of the catch-up amount in the second year. It also replaces the current standard that employers use to determine their pension liabilities, the 30-year Treasury bond interest rate, with a corporate bond rate for two years through Dec. 31, 2005. Grassley said Thursday that, without the change, companies could have been forced to overfund their pension plans, a move that could have discouraged them from continuing to offer the benefit. “In setting pension plan rates, Congress has to ensure that companies make adequate pension plan payments,” Grassley said. “We also have to make sure we don’t impose such onerous rules that companies declare bankruptcy or drop their pension plans altogether. I look forward to working on a long-term solution that strikes the right balance.” Copyright �2004 TDD, LLC. All rights reserved.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.