Sens. Charles Grassley and Max Baucus today introduced pension legislation that would create a new method for calculating pension liabilities, raise PBGC premiums for fully funded plans and increase premiums for larger companies with underfunded plans whose credit ratings drop below investment grade for two successive years.
The liability calculation method would be based on the corporate bond yield curve, while premiums to the PBGC for fully funded plans would be hiked to $30 per participant, from $19.
The Senate bill would also keep companies with pension assets that are less than 80% of liabilities from increasing benefits, and force companies with assets that are less than 60% of liabilities to freeze their plans.
If passed this year, most of the provisions would take effect in 2007.
The full Senate Finance Committee will vote on the bill Tuesday. Mr. Grassley, R-Iowa, chairs the committee, and Mr. Baucus of Montana is the ranking Democrat on the panel.