Released: August 04, 2006

Senate approves pension protection bill

Source: By John Crawley, Reuters (Free Registration)

The Senate on Thursday approved and sent to President George W. Bush legislation to shore up beleaguered corporate pensions and stabilize the deficit-ridden federal program that insures them. Lawmakers voted 93-5 to clear the measure, which was identical to a bill approved last week by the House of Representatives.

Sen. Mike Enzi, a Wyoming Republican who led months of difficult House-Senate negotiations that hammered out the main provisions said the bill would serve as a foundation for retirement security for millions of Americans.

The legislation overhauls pension funding rules and closes loopholes that allow companies to claim their pensions are financially sound even though some plans carry staggering liabilities.

The law would require companies managing single-employer traditional pensions—so-called defined-benefit plans that offer a fixed and secure benefit at retirement—seven years to fully fund them beginning in 2008.

Nationwide, promised benefits in corporate defined benefit pension programs covering nearly 35 million workers and retirees outpace assets in those plans by $450 billion, government figures show.

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