Proposal May Aid Pension Sponsors Business Insurance (09/12/02) p.1; Geisel, Jerry
The ERISA Industry Committee has gone to Capitol Hill to submit a proposal they say would lower the contribution amount employers pay to pension plans. The centerpiece of the plan is a new calculation method for determining pension liabilities that would supplant the use of long-term U.S. Treasury bonds currently used to calculate pension liabilities with the yields of long-term and highly rated corporate bonds. Should Congress vote to adopt the method, ERISA says, employers would be able to use a higher interest rate assumption to value their pension liabilities and plan contributions. As a result, corporate cash flow would likely improve.