US - The proposed Deficit Reduction Act would ease the financial burden on the Pension benefit Gauranty Corp by enforcing a fee on companies that dump their pensions on the debt-ridden agency.
The House of Representatives narrowly passed the conference agreement on the Deficit Reduction Act with a vote of 212-206, which would achieve net savings of nearly US$40bn in mandatory spending.
As one of the stipulations in the bill, an companies will be forced to pay termination premium of $1250 per plan participant of $3750 - three yearly instalments of $1250 - if they terminate plans while in bankruptcy. The bill would also increase the premium paid to the PBGC by managers of multi employer pension plans from $2.60 to $8 per participant, beginning in 2006.
This would come as welcome news to the PBGC, which currently protects the pensions of 44m workers and is saddled with a deficit of nearly $23bn.
John Boehner, chairman of the House Education & the Workforce Committee said the Act finally placed the PBGC on more solid financial ground.
“This proposal also adds momentum to House and Senate efforts to finish work early next year on comprehensive reforms to our nation’s outdated pension laws,” he said.
Bill Thomas, chairman of the Ways and Means Committee said this bill was an important step in removing “wasteful and unnecessary” spending from the budget.
I urge the Senate to quickly pass this legislation and send it to the President’s desk, said Thomas.
The proposed cold-calling ban may be ineffective if a collaborative regulatory approach between the UK and the European Union (EU) is not maintained post-Brexit, the Pensions Management Institute (PMI) has warned.
Some 56% of defined contribution (DC) asset managers do not believe they will have transaction cost information in time for pension funds' March year-end statements, according to Lane Clark & Peacock (LCP) research.
NEST has appointed Clive Elphick, Martin Turner, Mutaz Qubbaj and Chris Hitchen as trustee members of its reshaped board.
Most people want to avoid investing in projects that contribute to climate change, and would consider moving to another less-exposed provider, according to a survey commissioned by ClientEarth.