Companies want pension rules changed
Some of the nation's largest companies are asking Congress to suspend rules requiring them to contribute more money to pension funds. Washington Bureau Chief John Dimsdale reports.
More on The Economy, Retirement - Saving, Politics, America's Financial Crisis
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.
Comments
Comment | Refresh
Post a Comment: Please be civil, brief and relevant.
Email addresses are never displayed, but they are required to confirm your comments. All comments are moderated. Marketplace reserves the right to edit any comments on this site and to read them on the air if they are extra-interesting. Please read the Comment Guidelines before posting.
You must be 13 or over to submit information to American Public Media. The information entered into this form will not be used to send unsolicited email and will not be sold to a third party. For more information see Terms and Conditions and Privacy Policy.