ERIC and Over 300 Companies Request Defined Benefit Funding Relief
Washington, DC -- ERIC along with over 300 companies and organizations in a November 12th letter urged the Chairmen and Ranking Members of the House Ways and Means Committee, House Education and Labor Committee, Senate Health, Education, Labor and Pensions Committee, and the Senate Finance Committee to approve temporary relief from the Pension Protection Act's funding requirements.
The letter discusses the impact of the financial crisis on defined benefit plan funding and urges the Members to consider legislation that would help companies navigate the current economic crisis while minimizing adverse impacts on the DB pension plans they sponsor.
The group urged Congress to "consider making technical corrections to the PPA, that we believe implement Congressional intent, and adopting temporary provisions that deal with the financial crisis," such as:
Permitting full smoothing of unexpected losses
Removing restrictions on asset smoothing
Allowing sufficient time to transition to the PPA's 100% funded target
Providing automatic IRS approval for certain funding elections to keep plans viable
Clarifying end-of-year valuations
Permitting fixed interest rates to be used for Code section 415 limit purposes so as to avoid benefit reductions
ERIC is engaged in a coalition focused on the economic crisis and the effect on defined benefit funding issues, and in an earlier letter urged the Ways and Means Committee and the Education and Labor Committee to approve temporary legislative relief for Pension Protection Act of 2006 funding requirements for 2008 and 2009. A significant number of companies are faced with funding shortfalls resulting from the currently depressed investment markets, a situation that is viewed as temporary.
For more information:
The ERISA Industry Committee
1400 L Street, NW, Suite 350
Washington, DC 20005
E-mail: firstname.lastname@example.org www.eric.org