The economic woes are now pushing roughly 300 companies and business groups to make a request in a letter today to congressional committees to suspend portions of a 2-year old law they say could force them to make job cuts as they shift scarce money into ailing retirement pools. The authors include some of the nation’s biggest corporate names from a variety of sectors, including Ford Motor Co., IBM Corp., Pfizer Inc., and Verizon Communications Inc.
The lobbying effort aims to change a 2006 pension reform law as part of any economic stimulus plan in a lame-duck session of Congress that begins next week. Companies warn that the current law could force them to tie up large sums of cash they need in the face of a global recession. “Unless the funding rules are modified, they will increase U.S. unemployment and slow our economic recovery,” the letter warns.
Under the Pension Protection Act of 2006, companies facing shortfalls must bring their plans up to full funding over the next seven years. Those that fall short will be forced to take steps such as freezing the accrual of new benefits for current plan members.
The letter asks Congress for changes to the law, such as giving companies more time to reach full funding. It also seeks accounting changes that would allow companies to spread losses to their plans over longer periods of time, a process that would temper the effect of sudden drops in plan values.
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