Companies seek relief from pensions
TEXT OF STORY
Steve Chiotakis: For a lame-duck legislature, Congress will have plenty to talk about when that session begins on Monday. The Big Three have been begging for help. And now they — along with nearly 300 others, ranging from drug companies to food makers — are asking for a different kind of help. Relief from pension contributions. Here’s Alisa Roth.
Alisa Roth: This story actually starts two years ago, when President Bush signed the Pension Protection Act. Among other things, it says companies with under-funded pension plans need to contribute more money to them.
These days, though, there are an awful lot of defined benefit plans that are under-funded, since their values have dropped along with the stock market. And the companies that fund those plans — like Kraft Foods, Pfizer, Ford and Boeing — are worried that paying up will cost them jobs. Or worse.
Alicia Munnell directs the center for retirement research at Boston College. She says that’s probably no exaggeration. So Congress might just be willing to listen.
Alicia Munnell: We have seen enough companies on the brink of bankruptcy. I think Congress might want to offer some temporary relief.
In the long term, though, she says to look for new rules — ones that would let companies contribute more when times are good, and cut back when they’re not.
In New York, I’m Alisa Roth for Marketplace.
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