(AFX) - Major provisions of the House pension protection bill:
--Requires employers with defined-benefit plans to make sufficient contributions to meet a 100 percent funding target and erase funding shortfalls over seven years.
--Forces employers with 'at-risk' plans to make accelerated contributions. Under one scenario, a plan is deemed at-risk if it falls below 70 percent funded status using assumptions that employees take the most expensive benefits and retire at the earliest possible date.
--Changes the interest rate model used for measuring a company's pension liabilities.
--Prohibits employers and unions from increasing benefits if a plan is less than 80 percent funded, unless the benefits are paid for immediately.
--Restricts the use of deferred executive compensation arrangements for employers with severely underfunded pension plans.
--Gives bankrupt airlines with a 'hard freeze' on their plans an additional 10 years to meet funding obligations. A plan sponsor would pay a termination premium of $2,500 per plan once it emerges from bankruptcy. Airlines with a 'soft freeze' on their plans would get an extra three years and must also pay the $2,500 premium if they terminate their plan upon entering bankruptcy. The premium would have to be paid when they emerge from bankruptcy.
--Ends the legal uncertainty surrounding cash balance pension plans and establish a simple age discrimination standard for all defined-benefit plans.
--Bars companies from forcing employees to invest any of their own retirement savings contributions in company stock.
--Permits qualified financial companies to offer face-to-face investment advice to help employees manage 401(k) and other retirement options. Those companies would be required to base recommendations on employer-sponsored plans such as 401(k)s on a certified computer model.
--Makes permanent provisions in a 2001 tax cut law that raised annual contribution limits for IRAs.
--Gives taxpayers the option of depositing a portion of their federal tax refund directly into an IRA.
--Allows employers to offer automatic enrollment in employer-sponsored defined contribution pension plans such as 401(k)s.
--Allows employers with defined benefit pension plans that are more than 120 percent funded to use assets to fund retiree health benefits.
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