Blogging Employee Benefits

July 28, 2006

Not Far To Go for Pension Farrago

Filed under: Legislation, Pensions — Fuguerre @ 7:00 am

We may still see a House vote on pension legislation today, or even tomorrow if House leaders think it worth keeping reps around an extra day to get the bill through this year. By all reports, key congressional conferees have settled on a compromise on the pension funding, hybrid plan, and defined contribution plan bulk of the package, and staffers have pulled all-nighters to draft legislative language. The final sticking point seems to be whether this long-awaited pension initiative will pick up tax extender hitchhikers, with House Republicans boycotting last night’s meeting scheduled to resolve that final issue. If the House does pass the bill before leaving town this week for a pre-election summer break, the Senate remains around next week to send the package to the President.

Meanwhile, the Administration persists in measuring the expected effects of the pension funding heart of the bill against a benchmark that all sides had originally broadly agreed as over-valued, based on the 30-year Treasury bond rates that are currently in effect for valuation of pension current liabilities, as evidenced in a report recently released by Rep. Miller. Lately we haven’t been hearing the veto threats that such reports were frequently associated with much of the past year; but with the compromise bill including breaks for airlines – one of the largest sources of risk for the PBGC – and numerous other provisions that don’t produce better figures than that over-valued benchmark, the veto status of the bill remains an open question, I would imagine.


  1. And here’s H.R. 4, an early look at the congressional conference committee’s work. As I understand how things stand, this represents the compromise bill, but is not technically the conference committee bill, but rather the House’s attempt to push the bill through without the tax extenders, which the House wishes to send through with estate tax legislation rather than with the pension legislation.

    Comment by Fuguerre — July 28, 2006 @ 6:32 pm

  2. Estimated Budget Effects of H.R. 4, as published by the JCT

    Comment by Fuguerre — July 29, 2006 @ 12:19 am

  3. Summary of H.R. 4 issued by the House Committee on Education & the Workforce, with a caution: there are at least two errors – the deductibility limit was not increased to 180% of current liability; and the “soft freeze” is absent from the first special rule the summary describes for for commercial airlines.  Given that most representatives who voted late Friday night had probably not even seen the legislative language, much less had the time to read it, one wonders if they were casting their votes based on summaries such as this.  Those two particular issues might not have affected any of the votes, but you never know.

    Comment by Fuguerre — July 31, 2006 @ 7:28 pm

  4. If we’re polling this, I prefer my clambakes out on the Vineyard.

    Comment by Fuguerre — August 1, 2006 @ 12:55 pm

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