House Approves Temporary Pension Benchmark Fix
The U.S. House of Representatives voted 397-2 last Thursday to approve H.R. 3108, a bill that seeks to save sponsors of defined benefit plans billions of dollars by replacing the old benchmark interest rate used in pension calculations with a temporary benchmark based on a blend of corporate bond index rates.
The Senate is still debating H.R. 1776, a bill that would provide a permanent replacement for the old pension benchmark rate, the 30-year Treasury bond rate.
James Klein, president of the American Benefits Council, Washington, put out a statement welcoming House passage of the temporary replacement bill and calling for Congress to come up with a permanent benchmark replacement based on a corporate bond rate blend.
“The council has consistently recommended the use of a corporate bond rate blend as the ideal solution,” Klein says in the statement.