President Barack Obama on Friday signed legislation that offers funding relief for defined benefit pension plans.
The bill, the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act, passed the House late Thursday by a 417-1 vote. An identical measure was approved by the Senate on June 18.
Under the new law, DB plans will be allowed to stretch out amortization periods for investment losses for two of the years between 2008 and 2011, either over a period of up to 15 years or over a nine-year period, at the option of the plan sponsor. The previous law required plans to amortize their investment losses over seven years.
One provision requires employers that extend their amortization periods to make additional contributions to their pension funds if they pay employees in excess of $1 million a year, pay out extraordinary dividends to shareholders or redeem in excess of 10% of the market capitalization of their stock.
The new law also includes provisions that would restore to doctors cuts in Medicare reimbursements that went into effect June 1.