Cash Balance Pensions Debated New York Newsday (04/10/03) p.A38; Luhby, Tami
The Treasury Department is addressing cash balance pension conversions, which were prevalent in the last decade until the Clinton administration blocked them, and labor interests are working to ensure that older workers secure certain protections. They contend companies save money because plans reduce benefits of people close to retirement, while the Treasury says the plans are nondiscriminatory. Authorities have been hearing testimony on the matter but likely will not make a ruling for months. The Bush administration has made no definitive move to support one side or the other. Unlike other pension plans, cash balance pensions extend pension accruals more evenly over an employee's tenure, making them more appealing to younger workers and frustrating older workers who feel the plans punish them. Democrats recently proposed a bill that would have companies guarantee employees that have 10 years of tenure or are age 40 or older the ability to choose among the types of plans.