Pension Relief Moving in Congress

By December 11, 2008Human Resources, Taxation

AP reports, “Congress acts to provide relief for pension funds“:

WASHINGTON (AP) — Congress is moving to relieve businesses of paying billions of dollars in required contributions to their pension plans in the coming year, cash that the companies say they need to stay afloat in a worsening recession.

The legislation, which could reach the president’s desk this week, has been a priority of business groups that contend that some companies will have to freeze pension plans, lay off workers or even go bankrupt without the relief.

Many businesses with defined-benefit plans have been staggered by the double blow of meeting requirements under a 2006 law that they fully fund their plans at the same time the value of the plans has been eaten up by declines in the markets where the pension funds are invested.

“The drop in the value of pension plan assets coupled with the current credit crunch has placed plan sponsors in an untenable position,” business groups, including the U.S. Chamber of Commerce, the Business Roundtable and the National Association of Manufacturers, wrote lawmakers.

The text of the NAM’s letter to the House is available here. The text of the legislation is here. It appears the Senate debate will begin shortly.

5:30 p.m. – Debate starting.

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