NU Online News Service, April 14, 2004, 6:01 p.m. EDT – The new Pension Funding Equity Act of 2004 provides relief for mutual insurers as well as for pension plan sponsors.[@@]
One section of the bill lowers funding costs for sponsors of defined benefit pension plans by temporarily replacing the very low 30-year Treasury bond rate with a much higher corporate bond rate index. The move cuts funding requirements by increasing the amount that employers can assume plan assets will earn over the course of employees’ careers.
Massachusetts Mutual Life Insurance Company, Springfield, Mass., points out that another section of the bill, H.R. 3108, repeals the Section 809 tax on mutual life insurers.
Congress enacted Section 809 of the Internal Revenue Code in 1984 to ensure that life insurers with stock company charters could compete with the mutual life insurers that then dominated the market, MassMutual says.