Companies want pension rules changed
TEXT OF STORY
Tess Vigeland:
Last night, a bipartisan group of senators announced agreement on a bill that would temporarily change pension rules for U.S. companies.
Right now, they have to make sure they have money on hand for a certain percentage of their pension obligations.
But corporations are hoping to make some of that requirement go away.
John Dimsdale reports from Washington.
John Dimsdale:
Two years ago, Congress cracked down on under-funded pensions with a law requiring companies to speed up payments and eliminate shortfalls by 2015.
Under that law, company contributions into defined benefit pension accounts would have to increase $90 billion this year.
Now, a group of companies is backing a Senate bill to give them at least a year’s respite from that requirement. The companies argue that in the midst of a recession, diverting scarce profits into pension plans means less money for investments and job creation. But actuary Jeremy Gold rejects the idea that pension contributions mean fewer jobs since pension money is invested.
Jeremy Gold: Contributions go into the pension plan, end up becoming new capital, and new liquidity for other companies and those very same dollars are used to hire people throughout our economy.
Besides, Gold says, allowing companies to shirk their pension obligations puts the government’s already-threatened pension insurance fund at greater risk.
In Washington, I’m John Dimsdale for Marketplace.
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