U.S. employers will be required to contribute more than $108 billion into their defined benefit plans this year, according to an analysis by Watson Wyatt. Although that´s roughly $16 billion less than employers would have had to contribute without the passage of a new pension funding relief law late last year, Watson Wyatt pension experts say employers will still need additional relief. “This new law is a positive first step,” says Alan Glickstein, a senior retirement consultant with Watson Wyatt. “However, we urge lawmakers to pass additional temporary funding relief as companies transition to new, more restrictive funding requirements while battling declining pension asset values and a weakened economy.”
Watson Wyatt estimates that even with the enactment of the Worker, Retiree and Employer Recovery Act of 2008, both the required contribution levels in 2009 ($108.7 billion) and 2010 ($102.8 billion) will mark a significant jump from 2008 ($38 billion). Additionally, some employers that fail to meet the minimum 80 percent funded threshold may contribute an additional $3.2 billion. Otherwise, the payment of lump-sum benefits would be restricted under the Pension Protection Act.
