This article from the Wall Street Journal today–“Pension Agency Warns Against Corporate Relief“–states that “Congress is likely to pass a broad relief measure, in the form of a more generous interest-rate formula for figuring basic contribution requirements” in order to provide some relief for the great number of pension plans which are underfunded. However, the article goes on to state that some companies are seeking more than that–i.e. that some companies want relief from “steep catch-up contribution requirements, under a special set of rules enacted in 1987 to protect workers and the government’s pension safety-net program run by the PBGC.” The article states that airlines “are putting intense pressure on Congress to grant struggling industries temporary relief from the catch-up rules.”
The Bush administration is on record as being opposed to this. However, the article notes that “influential congressional leaders are widely believed to be pushing relief.” The worry is that not providing this relief will dump more plans into the PBGC. The PBGC has issued a report bolstering the White House position, that estimates that eliminating catch-up contributions for seriously underfunded plans would increase its overall unfunded pension liability by $40 billion over the next three years.
This article from the New York Times highlights some of the issues involved: “Failed Pensions: A Painful Lesson in Assumptions.”