WASHINGTON — Creating permanent funding rules heads the 2005 agenda for lawmakers active in pension and retirement issues and for lobbyists representing plan sponsors.
Employers' efforts to change the benchmark for valuing liabilities, contributions and PBGC insurance premiums for underfunded plans from the 30-year Treasury bond culminated in the Pension Funding Equity Act of 2004 in April. But because that law expires at the end of next year, companies once again face uncertainty in determining their liabilities and contributions, and lobbyists representing employers have been huddling with staffers of key lawmakers to craft legislation that would provide stability to plan sponsors.
Although the new law lets companies use a basket of investment-grade corporate bonds as the benchmark and gives airlines and steel companies with underfunded plans a pass on accelerated contributions this year and in 2005, the Bush administration's proposal for permanent funding rules uses an approach bitterly opposed by employers. That approach would use a yield curve based on corporate interest rates that would peg the liabilities for each company along the curve, based on their work force demographics.
Now, employers and their lobbyists are hoping that key lawmakers, such as Rep. John Boehner, R-Ohio, chairman of the House Education and the Workforce Committee, will craft a bill that will be palatable.