Legal

House Committee to Consider Pension Funding Relief Bill

By Staff Report

Mar. 17, 2010

The House Ways and Means Committee is scheduled Wednesday, March 17, to consider a soon-to-be-introduced jobs bill that is expected to include provisions that would give employers more time to amortize pension shortfalls.


The measure also is expected to include provisions to mandate better disclosure of 401(k) plan fees to plan participants.


The details of the pension funding relief provisions in the forthcoming legislation, the Small Business and Infrastructure Jobs Tax Act of 2010, are not available yet. But Washington observers expect the provisions to be similar to those embedded in a broader bill the Senate passed last week.


Under the Senate measure, H.R. 4213, employers could choose to use one of two schedules to amortize shortfalls. Under one schedule, employers could fund shortfalls over 15 years for any two plan years between 2008 and 2011. Current law requires employers to fund shortfalls over seven years.


Under the other alternative, employers would have to pay interest on a funding shortfall for only the two plan years they choose. After that, the regular seven-year amortization period would begin.


The Senate bill, though, includes certain conditions that employers would have to meet to obtain funding relief, including making extra contributions if any employee earns more than $1 million a year.


The Ways and Means Committee also is expected to include conditions employers would have to meet to qualify for the relief, though the details of those conditions are not yet known.


Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


 


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