By a wide majority, the Senate passed legislation to hopefully strengthen corporate pension programs and provide aid to pension insurance agencies already in debt. A similar bill rewriting pension rules has received approval from two House committees.
The Senate bill would require companies with pensions to set aside more money for retirees over time and pay higher premiums to the Pension Benefit Guaranty Corp. Country-wide, government estimates put the deficit of traditional pensions at $450 billion. The PBGC, which takes over failed plans, is itself underfunded by more than $22.8 billion. Last year, the PBGC calculated that financially weak companies with a reasonable chance of terminating their pensions are $96 billion short of covering promised benefits.
The bill also includes an exemption for financially weak airlines, giving them up to 20 years to repair their underfunded pension plans, in addition to the seven years provided by the bill to all companies to fix pension shortfalls.
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