Both the U.S. House of Representatives and the U.S. Senate have approved legislation that would change the funding requirements for defined-benefit pension plans and the premiums paid to the Pension Benefit Guaranty Corporation (PBGC).
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Download NowThe Pension Protection Act of 2006 generally requires that employers fully fund pensions and gives companies seven years to fund shortfalls.
In addition to amending the funding rules for defined-benefit pension plans, the legislation makes changes that would encourage more employers to use automatic enrollment in 401(k) plans.
The legislation also requires single-employer plans that are fully-funded to pay variable-rate premiums to the Pension Benefit Guaranty Corporation.
The legislation now goes to the desk of President Bush, who says he looks forward to signing the legislation.