The major pension reform legislation awaiting President George W. Bush's signature removes the uncertainty that had surrounded the pension industry's future, industry representatives said today.
The Senate on Thursday night approved the legislation by a 93-5 margin. The bill, which the House approved on July 29, represents the most sweeping revision of the nation's pension law since the Employee Retirement Income Security Act was enacted in 1974.
How companies should plan for their retirement programs has been in limbo since at least March, when top congressional lawmakers first started trying to resolve the differences between their separate pension-reform bills.
"It provides certainty," said David Speier, senior actuary for Watson Wyatt Worldwide. "That's good for companies."
The most obvious immediate legislative winners are Northwest Airlines Corp., Eagan, Minn., and Delta Air Lines Inc., Atlanta, which would get up to 17 years to fund their defined benefit plans; and American Airlines Inc., Fort Worth, Texas, and Continental Airlines Inc. Houston, which would get 10 years to amortize their funding shortfalls.
James Klein, president of the American Benefits Council, said the measure represented a "mixed bag" for employers and workers.
"The pension bill … is a very positive step for Americans participating in defined contribution retirement plans," Mr. Klein said in a statement. "However, as a result of the volatile pension funding rules enacted, I believe we will witness an unprecedented number of companies closing their well-funded defined benefit pension plans to new employees."