House Republican Leader John Boehner next week plans to introduce pension and retirement reform legislation that would allow companies with defined-benefit plans to double the amount of asset losses they can smooth when calculating their funding obligations through 2010.
The bill, called the Savings Recovery Act, would extend the amortization period for 2008 asset losses to nine years from the seven years mandated under current law, according to a bill summary being circulated by Boehner.
It also would require plan sponsors to pay only the interest on their 2008 losses during 2009 and 2010, with the rest of the losses amortized over the following seven years.
The bill also would raise the cap for three years on annual catch-up contributions for defined-contribution plans and IRAs to $10,000 annually, from the existing caps of $5,500 and $1,000, respectively. Catch-up contributions permit those nearing retirement age, 50 or older, to contribute additional savings to their retirement plans.
“Rep. Boehner’s support regarding relief for defined-benefit funding is a significant and positive development to protect both defined-benefit plans, 401(k) plans and jobs,” Mark Ugoretz, president of the ERISA Industry Committee, said in a statement.
“The provisions directly related to defined-benefit pension plans and defined-contribution retirement savings plans are critically important to protect retirement income security for millions of Americans,” added James Klein, president of the
