The Senate version of a highway funding bill approved Tuesday calls for less generous pension funding calculations for defined benefit plans than a House plan approved July 15.
The Senate version, which only funds the highway trust fund for nine months in order to force a more targeted long-range solution, allows plan sponsors fewer years to use funding stabilization rates. The House version lets sponsors continue using calculations that were slated to end with 2012 plan years until 2017.
The Senate originally removed the pension provisions entirely, but added a more modest approach to come up with some short-term funding. The pension change, referred to as smoothing, “is a dangerous gimmick that could lead to pensions being underfunded,” said Sen. Barbara Boxer, D-Calif., chairwoman of the Environment and Public Works Committee.
The two chambers have until Friday to reach a compromise before they adjourn and the highway trust fund runs out of money.