Senate Passes a Bill to Cover Pension Plans
New York Times (01/29/04) ; Walsh, Mary Williams
It is unclear whether the Bush administration will support
pension legislation recently approved by the Senate that would have to
be reconciled with two similar House measures before it could become
law. With the goal of reducing companies' pension burdens, the Senate
bill would set in place a new way of calculating pensions for two years,
and it would provide companies in certain industries with particular
aid. The temporary relief measure would allow companies with severely
underfunded pension plans to waive 80 percent of their required catch-up
payments for the first year and 60 percent of their catch-up payments
for the second year, and it would provide airlines, steel companies, and
unions with special pension-financing waivers. While the measure has
gained the support of industries struggling with particularly heavy
pension burdens, other companies have complained that the measure is
unfair. The Bush administration has, in the past, spoken out against
providing pension breaks to individual companies or sectors, saying that
such aid encourages companies to underfund their pensions. While
lawmakers who support the bill say that giving companies pension relief
for two years will allow legislators to find overall solutions to
current pension problems, critics say the plan will only make problems
worse by letting companies cover up their pension shortfalls.