Pension Funding Relief Passes Senate - (March 11, 2010)
If your orchestra runs a defined benefit pension plan or participates in the AFM multi-employer plan, please read on for important news regarding potential pension funding relief.
Yesterday, the U.S. Senate passed pension funding relief as part of a comprehensive jobs package. The overall bill now moves on to the House for final consideration. The League will keep you posted as the overall measure is finalized. In the meantime, following are the pension relief provisions included in the bill:
The bill would provide pension funding relief for single- and multi-employer defined benefit pension plans by giving them more time to absorb losses attributable to the 2008 market downturn and ensuing economic slow-down.
Single Employer Plans
Employers would be given two options to spread out their statutory pension funding obligations.
- The first would allow employers to repay their pension shortfall over nine years (instead of seven), with interest-only payments in the first two years.
- The second option would allow employers to pay back their pension shortfall over 15 years.
- Plans would be able to spread their 2008 investment losses over 30 years. Multi-employer plans would also be able to choose to smooth (i.e., average) their assets over 10 years (instead of five years).
The League has joined a broad range of national nonprofit organizations calling for pension funding relief, urging Congress to enact legislation that would allow sponsors of defined benefit pension plans to recoup the shortfall for 2008 over a longer, more manageable period than allowed under the Pension Protection Act.
The League will keep you posted as these pension relief provisions move ahead.
The League is a member of the Performing Arts Alliance, a coalition of national performing arts service organizations dedicated to advocating for national policies that recognize, enhance, and foster the contributions the performing arts make to America