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ERIC Updates


<nobr>Apr 27, 2005</nobr>

ERIC: Update on Boehner Pension Bill

Conversations with key Congressional staff indicate that House Education and Workforce Chairman John Boehner (R-OH) is still on track to introduce a pension funding & hybrid plan bill in the coming weeks. While timing of introduction is dependent on progress on the Congressional budget resolution as well as policy negotiations under way with the chairman of the House Ways and Means Committee Bill Thomas (R-CA), current expectations are that the bill will be introduced in 4-5 weeks.

In broad outline, the bill is likely to include:

  • a modified version of the long-term ERISA funding rules
  • some averaging of the short-term funding interest rate as well as smoothing of assets
  • a "modified" yield curve
  • restrictions on uses of credit balances
  • a higher liability calculation for chronically underperforming companies (using a "proxy" for credit ratings)
  • restrictions on benefit increases and payouts under certain circumstances
  • increases in PBGC premiums
  • a new disclosure notice
  • validation of hybrid plan designs as well as a provision related to conversions
After the bill is introduced, Rep. Boehner currently anticipates allowing some time for comment on the bill so that necessary revisions could be made before the bill is formally considered by his Committee.

Very shortly the members of the Pension Funding Task Force willl receive the corrected draft of ERIC's proposals for pension funding. We ask for your immediate attention to the draft so that it can be sent to the full ERIC membership in time to receive comments in advance of ERIC's next meeting of its Board of Directors, which is scheduled for May 18.

If you have questions or comments in the meantime, contact:
Janice Gregory, Senior Vice President (202)789-1400

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