Limited Relief Of Underfunded Defined Benefit Plans(TCSPF)

[slavenomore]

Limited Funding Relief For Defined Benefit Plans - GLG News

Added to recent legislation designed to postpone a 21% cut in doctors' Medicare reimbursements until December, was limited relief for underfunded DB plans. For any two plan years between '08-'11, shortfalls can be amortized for 15 years, or interest paid only for 2 years. Projections are this could save plan sponsors $129 billion over the next 7 years. Additional contributions would be required if an electing sponsor paid "excess" or "extraordinary" executive compensation.




.................more before this..and after....
The greatest impact of the PPA has been to reduce the liabilities and potential liabilities of the Pension Benefit Guarantee Corporation. As was predicted by many pension professionals, the PPA accelerated the freezing and termination of defined benefit plans as sponsors became even more sensitive to risk. Another impact of the PPA has been to encourage sponsors, whether continuing or terminating, to move to a less risky liability driven investment strategy.

The supporters of the bill ("The Preservation of Access To Care for Medicare Beneficiaries and Pension Relief Act"), project that up to $129 billion dollars which would otherwise be used to reduce unfunded pension liabilities, will be available for other purposes, which they hope will include job preservation.

This relief also applies to union sponsored defined benefit plans, such as the very troubled Teamsters Central States Pension Fund. However, it does not address the biggest problem multi-employer plans face: liability caused by the withdrawal of participating employers.

[x475]

sounds to me like a bandaid on a cut needing stiches....

[2631]

Originally Posted by slavenomore

Limited Funding Relief For Defined Benefit Plans - GLG News



The supporters of the bill ("The Preservation of Access To Care for Medicare Beneficiaries and Pension Relief Act"), project that up to $129 billion dollars which would otherwise be used to reduce unfunded pension liabilities, will be available for other purposes, which they hope will include job preservation.

This relief also applies to union sponsored defined benefit plans, such as the very troubled Teamsters Central States Pension Fund. However, it does not address the biggest problem multi-employer plans face: liability caused by the withdrawal of participating employers.

Well at least it is a step in the right direction, I think.

But I still believe that the CSPF will survive. Unfortunately some future retirees may have to take some hits on their benefits. But IMO it will survive.