Today’s Federal Register.
Regarding the Bush administration’s proposal (discussed here yesterday) addressing pension fund shortages, Christine Dugas for USA Today writes: “Treasury plan could slash pension payouts .” Several things from the article worth noting: On July 15, the House Education and the Workforce Subcommittee on Employer-Employee Relations will hold a hearing on the proposal. Regarding lump sum payouts under the proposals, the rules would not affect lump sum distributions in the first two years, but during the next three years, a new formula gradually would be phased in that would be based on a corporate bond yield curve matching the age and tenure of the workers in a plan which would generally result in lower lump sum payouts.
Another article by Corbett B. Daly for CBS MarketWatch–“Congress reacts to Bush pension plan“–reports how members of Congress and others are reacting to the pension funding proposal. According to the article, the American Benefits Council has called the plan “unnecessarily complex.” ABC President James Klein is quoted as saying that “[t]here are serious concerns with the administration’s proposal” and that “using a yield curve for valuing pension liabilities would inject needless volatility and complexity in pension funding.” He argues further that “increased volatility in particular would hurt defined benefit plan sponsorship at a time when the pension system needs strengthening.”
More on the Bush pension proposal: Alan Beattie provides this report on the subject for the Associated Press via FT.com and Yahoo! News: “Mixed greeting for Bush pensions plan” and John D. McKinnon for the Dow Jones Business News via Yahoo! News writes: “Bush Pension Plan Seen Offering Transition Period.” Also, this from Forbes.com by Ari Weinberg: “White House Throws Pensions A Curve.”