Pension Deal Reportedly Near Finish Line
Observers say that a deal could be struck soon on federal pension-reform legislation. Reuters, which has followed this story closely for months, quotes Sen. Grassley of Iowa as saying that only loose ends remain. As to the substance of the bill, "Grassley gave few details, but indicated the final version of the bill was expected to limit companies' use of credit balances, a pension accounting benefit that can be used to make plans look more healthy than they actually are. This would affect many companies such as General Motors Corp., which analysts say has a large credit balance."
Legislators have apparently not reached any decisions on proposals to give special relief to struggling airlines. As the story notes, "Bankrupt carriers Northwest Airlines and Delta Air Lines have been pressing negotiators to include a provision that was in the Senate version of the bill, giving them 20 years to pay off pension underfunding." Sen. Baucus of Montana reportedly said that making corporations put additional funds into pension plans due to the companies' poor credit ratings was off the table. Baucus said, "That's out."
Read the Reuters story as run in the New York Times here.
To me, the biggest part of this story (that really is not being told), is the repeal of the long-standing "conflict of interest" law. This will allow mutual fund companies to provide advice/management of their own funds, which most agree is a conflict of interest. I'm posting the latest news on the Pension Bill on our blog as information becomes available.