A new bill could help individuals cope with falling retirement account balances and employers cope with falling pension funding levels.
The bill, the “Worker, Retiree and Employer Recovery Act of 2008,” was introduced today by a group of 4 key senators.
The sponsors, who hope to get the bill through Congress by Friday, before the Senate leaves for the Thanksgiving recess, include Sens. Max Baucus, D-Mont., the chairman of the Senate Finance Committee; Charles Grassley, R-Iowa, the highest ranking Republican on the Senate Finance Committee; Edward Kennedy, D-Mass., the chairman of the Senate Health, Education, Labor and Pension Committee; and Michael Enzi, R-Wyo., the highest ranking Republican on the HELP Committee.
The bill, which at press time did not yet have a bill number, would:
- Give retirement plan owners ages 70 1/2 or older more time to take distributions. The provision would eliminate the pressure for retirees to sell assets while the market is down.
- Place a 1-year moratorium on required minimum distributions from individual retirement accounts in 2009. This proposal would cost about $3.7 billion over 10 years, the bill sponsors estimate.
- Phase in the Pension Protection Act of 2006 funding target rules over 3 years. The bill would let plans that fall below the target funding percentage for a particular year fund up to a specified funding percentage for that year, rather than requiring that the plans get the funding level up to 100%. This provision would take effect as if it had been included in the PPA, the sponsors of the new bill say.
- Let multi-employers elect to freeze their current funding certification based on the previous year’s level starting between Oct. 1, 2008, and Oct. 1, 2009.
- Extend for 1 year business tax relief that was included in the first economic stimulus package.
- Allow companies to write off a greater percentage of their investments in business assets, to free up cash for payroll and other expenses.