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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.

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