THE FULLERTON REPORT | JANUARY 2009
President Signs Pension Bill
President Bush on December 23 signed the Worker Retiree and Employee Recovery Act of 2008 (HR 7327). The bill provides temporary relief to businesses from pension funding requirements under the Pension Protection Act of 2006 (P.L. 109-280).
The House and Senate on December 10 and December 11, respectively, approved the pension technical corrections bill by unanimous consent. Passage of the measure came as House leadership dropped objectionable tax breaks advanced by Senate Democrats, forcing the Senate to approve a clean bill. Provisions in the bill change current law to provide tax relief for seniors age 70-1/2 or older who are required to take distributions from their retirement plans during the current market crisis. 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.
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 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 Corrections Act of 2008 (HR 6382), originally passed by the Senate in December 2007, and the House in March and July of 2008.
