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New law gives US companies break on pensions



Published: Mon, July 9, 2012 @ 5:34 p.m.

WASHINGTON (AP) — A new law will let companies contribute billions of dollars less to their workers' pension funds, raising concerns about weakening the plans that millions of Americans count on for retirement.

But with many companies already freezing or getting rid of pension plans, many critics are reluctant to force the issue.

Some expect the changes, passed by Congress last month and signed Friday by President Barack Obama, to have little impact on the nation's enormous $1.9 trillion in estimated pension fund assets. And it is more important, they suggest, to avoid giving employers a new reason to limit or jettison remaining pension benefits by forcing them to contribute more than they say they can manage.

The equation underscores a harsh reality for unions, consumer advocates and others who normally go to the mat for workers and retirees: When it comes to battling over pensions, the fragile economy of 2012 gives the business community a lot of leverage.

"That wouldn't do our members any good" if the government forces companies to make pension contributions they can't afford, said Karen Feldman, benefits policy specialist for the AFL-CIO, the giant labor federation that supported the legislation.


Comments

1sonnype(71 comments)posted 2 years, 3 months ago

These companies seem to be able to find the money to pay huge execurtive salaries and bounses but cant find the money to meet their pension responsibilities.Pensions end up in the PBGC and executives reap rewards for driving their companies into bankruptcy

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2TylerDurden(367 comments)posted 2 years, 3 months ago

The stimated pension fund assets are 1.9 trillion dollars. It is unsustainable plain and simple.
Even with CEO bonuses in the tens of millions of dollars, that is a mere fraction of a percentage of the pension liability.
Time to get on board with retirement plans where employees fund the majority themselves, like everyone else. Or else, watch the ship go down.

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3chevelle64(11 comments)posted 2 years, 3 months ago

i bet that doesnt apply to congressional pensions

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