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Effort to Cap Pension Payments

Senate measure would cut contributions to plans; House action uncertain.

By Susan Kelly | Updated on March 16, 2012

The Senate passed a bill this week that would allow companies to use a 25-year average of corporate bond yields when calculating their defined-benefit pension liabilities. If the measure becomes law, it could greatly reduce the contributions companies have to make to their pension plans, but it’s not clear whether the House will adopt the Senate provision.

The Senate measure is contained in S. 1813, a transportation funding bill. Kathryn Ricard, senior vice president of retirement policy at the ERISA Industry Committee, which represents major U.S. employers, says that a bill to extend transportation funding that the House produced in February did not include the pension provision.

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