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Pension legislation possible in 2014
By Kathy Mason, Vice President of Government Affairs
As you will recall, the Federal Reserve’s policy of keeping interest rates artificially low during the economic downturn resulted in many newspapers with defined benefit pension plans being required to make exceedingly large contributions to those funds to meet the 2006 Pension Protection Act requirements. To address this, pension legislation was approved in July 2012 that allowed businesses to determine their contributions over a longer period of time, reducing the effect that low interest rates had on those calculations. While we were pleased that Congress passed this legislation, we were well aware that the relief was concentrated in 2012 and 2013 and would phase out over the remaining three years to provide little relief.
This is exactly where many newspapers and other businesses find themselves today. Interest rates have not risen and many are facing the pressure of being required to make large contributions to those pension funds again, diverting scarce resources away from the newspaper or business. Even though NAA and other members of the pension coalition, including the American Benefits Council, were told not to seek pension stabilization again too soon, the effort to educate members of Congress about this dilemma began in earnest at the beginning of 2014. Meetings have been held with members of the House Ways and Means and Senate Finance Committees to explain the harmful consequences to businesses and jobs that could occur when the benefit of the prior legislation is phased out before the issue causing the problem is resolved.
Because pension stabilization is calculated as a revenue raiser by the Congress, there may be opportunities later this year to extend the ten percent corridor that was included in the 2012 pension relief for an additional four years by attaching a provision to must pass legislation. In early February, there was hope of doing exactly that when the Senate considered a three-month unemployment insurance extension. Unfortunately, that effort was not successful but may be considered again later in this session of Congress. Another opportunity may present itself later in the year when transportation legislation must be considered. And, at the end of the year, legislation affecting the multi-employer pension plans will expire and must be addressed.
We will continue to push for a continuation of this much needed pension stabilization at every opportunity.
First Published: March 02, 2014
About the Author
Kathy Mason is vice president of government affairs at NAA. Her responsibilities for the last 11 years include tax, pension, labor, and environmental issues. She has more than 15 years of experience advocating for tax issues at the federal level. Prior to NAA, she was executive director of the Forest Industries Council on Taxation.
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