WASHINGTON (Reuters) - The Senate unanimously approved legislation on Thursday to help company pension plans and retirees that have been hard hit by the financial crisis.
Under the bill, generally healthy multi-employer pension plans hurt by the decline in the stock market would not have to make drastic pension plan contribution increases and worker benefit cutbacks that many companies had feared.
Multi-employer pension plans cover workers from more than one company, which, unlike traditional single-employer plans, allows workers to move from job to job and still contribute to the plan.
Large companies with pension plans have seen the value of their plan assets plummet, confronting the companies with heavy funding obligations for 2009 under existing pension law.
Since the beginning of 2008, the benchmark Dow Jones Industrial Average stock index has fallen to about 8,500 from over 13,000, hammering many pension fund portfolios.
In addition, under the legislation, people aged 70-1/2 or older would not have to take distributions from their retirement plans as required under current law. This would allow savings to stay put and prevent a bear-market tax hit.
“This is important funding relief for families, seniors and firms that needed to get done ... The measures in this bill will allow folks to avoid being saddled with a tax hit that wouldn’t exist under normal market conditions,” said Montana Democratic Sen. Max Baucus in a statement.
Reporting by Kevin Drawbaugh
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