US - The Pension Protection Act, introduced by Republicans in an effort to shore up the US defined benefit pension system, has been passed by the House education and workforce committee.
Chairman John Boehner, who introduced the legislation, slammed Democrats who he said chose to be “spectators” in the process instead of participants. All 27 Republicans voted in support of the bill, while committee Democrats voted “present”.
The Act includes new funding requirements which aim to ensure employers adequately fund their pension plans, increases employer disclosure on the financial status of their plan and provides a permanent interest rate based on a modified yield curve.
During consideration of the bill, the committee approved a substitute amendment offered by Boehner to help resolve legal uncertainty surround cash balance or hybrid plans.
“Cash balance pension plans are the future of the defined benefit system and it’s critically important that Congress act to resolve the legal uncertainty that is jeopardising generous pension benefits for workers across the country,” Boehner said.
The amendment establishes an age discrimination standard for all DB plans that clarifies current law with respect to age discrimination requirements under ERISA on a prospective basis.
The bill does not set different rules for hybrid plans or conversions, rather a standard for DB plans across the board. The measure also prohibits employers from reducing or cutting any vested benefits workers have earned during a conversion to a cash balance plan.
Kim Gubler says it is time that schemes and administrators reassess SLAs and look at what real people need from their pension schemes and when
The Pensions Regulator (TPR) is focusing on reducing the number of "poorly-run" schemes as it seeks to improve standards across the board.
Prudential Retirement has completed around $2.6bn (£2bn) of reinsurance contracts for UK pension scheme longevity risk since the start of the year, it has disclosed.
Funding standards for DB schemes have increased exponentially over the past decades. Con Keating says such significant overstatement of liabilities will lead to pushback through the courts.