Pension Proposal Could Have Significant Affect on Private Pensions
Although traditional private pensions aren’t very popular these days, there is still a small percentage of American’s whose retirement relies on these programs. A recent Senate proposal has brought private pensions back in the limelight with several pending rules that will affect private pension plans. Apparently Section 40312 of the “Moving Ahead for Progress in the 21st Century Act proposes some pension funding requirements that could adversely affect private, single-employer defined benefit plans.
This new Section states that the interest rates used to measure pension obligations would be inhibited withing a certain range. This would in effect, create patterns of interest rates that would reduce contributions in the first few years while increasing interest rates each year thereafter until they exceeded the level required by the current law. The interest rates changes would be something that plan administrators and sponsors would have to keep a keen eye on while they budget for contributions.
To read more about this new proposal check out the full article at AdvisorOne.