Finance, HELP Leaders Applaud Senate Passage of Pension Protection Plans
Pension relief for America’s families, seniors and firms heads to President’s desk
Washington, DC – Senate Finance Committee Chairman Max Baucus (D-Mont.), Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Edward Kennedy (D-Mass.), Finance Ranking Member Chuck Grassley (R-Iowa), and HELP Ranking Member Mike Enzi (R-Wyo.) today applauded final passage in the Senate of H.R. 7327, pension legislation that closely reflects the bipartisan bill introduced by the Finance and HELP leaders in November. The bill includes important modifications to pension distribution requirements for seniors and businesses that will help ease financial strain in a lagging economy. Among the provisions is a measure to provide relief for seniors age 70 and 1/2 or older who are required to take distributions from their retirement plans under current law. The provision would allow savings to stay put and avoid a tax hit for seniors when the market is down. Another measure gives generally healthy multi employer pension plans that were hurt by the decline in the stock market the ability to avoid drastic contribution increases and cutbacks in worker benefits.
“This is important funding relief for families, seniors and firms that needed to get done, and I’m pleased that we could come together to make it happen. Americans expect Congress to help guard their retirement savings and the measures in this bill will allow folks to avoid being saddled with a tax hit that wouldn’t exist under normal market conditions,” Baucus said. “We’ve made pension plan requirements responsive to the needs of America’s seniors and employers, and I believe this bill is a solid effort to move the economy toward recovery.”
Kennedy said, “This vital legislation addresses the immediate needs of workers, retirees, and businesses hit hard by the financial and economic crisis facing our country. With trillions of dollars in retirement savings in serious jeopardy, the relief in this bill will help Americans weather the storm until the economy begins recovering. I look forward to continuing to work with my colleagues and President-elect Obama to keep pensions safe and guarantee the retirement security of workers in communities across America.”
“The economy dictates these stop-gap measures, and it’s good that Congress is acting to look out for retirees and for employers and workers weathering the economic storm. In addition, most of this bill contains technical corrections to the landmark 2006 pension reform bill. Since two years have passed, it is about time we make these changes,” Grassley said.
“The relief provided by this bipartisan bill will help families and bring temporary relief they need to weather the troubled markets threatening the safety of retirement savings for millions. Working together, Congress has passed a balanced package that will help protect individual retirees, workers, and pension plans while helping our economy recover,” Enzi said. “I’m pleased that we could reach an agreement that recognizes the economic stress and uncertainty families are feeling.”
Additional provisions in the bill will allow single-employer pension plans to account for expected and unexpected earnings in addition to contributions and distributions when determining the value of the plan’s assets. Those plans that fall below the set target funding percentage for a particular year (e.g., 92 percent in 2008), will be required to fund up to the specified funding percentage for that year, instead of 100 percent. Other provisions in the bill were also included in the Pension Protection Technical Correction Act of 2008, originally passed by the Senate in December 2007 and the House in March and July of this year.
A full summary of the bill can be found in the printer-friendly version of this release.
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