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Ryun Votes for the Pension Protection Act of 2005
H.R. 2830

Washington, Mar 8 -

Rep. Boehner (R-OH) introduced H.R. 2830, the Pension Protection Act of 2005, on June 9, 2005. This bill would fix some problems associated with under funded employer pensions by clarifying their calculation. This bill would calculate the fully funded level of a pension as though all beneficiaries were to take an immediate lump sum payment. However, the Secretary of the Treasury would apply an interest rate to discount the value of a future stream of income into the present value. This bill would also calculate the fair market value of a pension as 90% to 110% over a three year average instead of the current 80% to 120% over a five year. This could increase the volatility of the plan, but would help ensure they are not under funded.

H.R. 2830 also includes several provisions that will increase the incentives for employers to fully fund their pension plans. It would require employers to pay all funding shortfalls with interest within five years instead of the currently allowed thirty years. It would also allow tax deductible over funding of pension plans by up to 150%, further encouraging employers to dedicate funds to their employees retirement. Finally, this bill prohibits employers from making new promises to its employees when it has not fully funded its prior promises.

It is important that we make sure employers deliver on their promises to employees. H.R. 2830 passed with my support by a vote of 294-132 on December 15, 2005. It has also passed the Senate and is currently in conference.

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