President Obama recently signed the Moving Ahead for Progress in the 21st Century Act (H.R. 4348), which makes significant changes in pension law, including pension funding stabilization provisions and substantial increases to PBGC premiums over the next several years.
For plan years beginning after December 31, 2011, employers can temporarily use higher interest rates to calculate liabilities under their single-employer defined benefit (DB) plans, which will result in smaller minimum-funding contributions in the short-term. The pension funding stabilization provisions attempt to address employers’ concerns that historically low interest rates have resulted in higher minimum-funding contributions during a weak economic climate.
