NU Online News Service, April 13, 2004, 1:33 p.m. EDT – The American Academy of Actuaries, Washington, is welcoming enactment of the new pension rate law.[@@]
For 2 years, the law will help employers that sponsor defined benefit pension plans by changing a factor in the minimum plan contribution formula. The law will cut employers’ plan funding costs by replacing the 30-year Treasury bond rate with a higher benchmark rate based on a long-term corporate bond rate index.
The House and the Senate rushed to pass a conference report on H.R. 3108, the Pension Stability Act, earlier this month, and President Bush rushed to sign the bill Saturday so that employers can apply the rate change to their first-quarter pension contributions, which are due April 15.
The passage of H.R. 3108 “is an important first step by Congress and the administration in setting the stage for changes to ensure that the United States continues to encourage employees’ and employers’ support for the financial security and stability provided through defined benefit plans,” Kenneth Kent, vice president of the actuarial academy’s Pension Practice Council, says in a statement. “Both employees and employers needed this legislative correction to stabilize the funding of their pension plans.”