US - A call for government relief for corporate pensions has been addressed with legislation allowing multi-employer pension plans to freeze their current funding status to avoid being classified as 'endangered' or 'critical'.
Consultants Watson Wyatt and Mercer also called for Congress to take action to address the problems faced by firms in the current economic climate (www.globalpensions.com; 14 November 2008).
Announced by Senate Finance Committee chairman Max Baucus and ranking member Chuck Grassley, along with Senate Health, Education, Labor and Pensions Committee chairman Edward Kennedy and ranking member Mike Enzi, the measures will allow plans impacted by the decline in the stock market to freeze their current funding status.
In addition, multi-employer plans that have established a funding improvement or rehabilitation plan for 2008 and 2009 will benefit from an extension from ten to 13 years to implement the measures.
Another provision will allow pension plans, for purposes of applying certain restrictions on benefit accruals, to use their 2008 funding status in 2009.
Kennedy said: "This bipartisan package addresses immediate pension needs arising from the financial crisis. It's an important first step, but there is much more to be done to protect families' retirement security.
"In these hard economic times, Americans have much to be concerned about, but they shouldn't have to lie awake at night worrying whether their hard-earned pensions will survive. I look forward to working with my colleagues to do all we can to see that employees' pensions stay safe and sound."
The measures are outlined on the Committee of Finance website.
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