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| 2003
News and Press Releases |
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HEADLINE:
Senator May Bar Pension Relief Sought By Business
By: Susan Cornwell
Reuters. December 5, 2003
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EXCERPT: Business groups pressed on Friday for pension relief from Congress before it leaves for the year, but an Illinois senator vowed to block the effort if it includes an additional break for companies with severely underfunded pension plans. Representatives of employers that offer traditional "defined benefit" pensions warned that lawmakers must replace old rules that required the use of the defunct 30-year Treasury bond interest rate in pension funding calculations. They said Congress had to act because a temporary legislative fix expires at the end of this year, and without it, their pension funding requirements would balloon. "Absent legislation, beginning in early 2004, many companies will face inflated financing and premium requirements -- sometimes hundreds of millions of dollars -- that will draw cash from other important business requirements," the groups said in a letter to Senate Republican Leader Bill Frist. Among those signing were the U.S. Chamber of Commerce and the National Association of Manufacturers. Sen. Peter Fitzgerald, a Republican, said he supported proposals to fix the 30-year Treasury interest rate problem by letting businesses use high-grade corporate bond rates in pension calculations instead. But he would object to plans to add in a funding holiday for companies with pensions funds that are seriously in the red. Many of the companies that would get the extra relief are airlines, but they also include automobile and steel firms.
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