NEWS RELEASE

March 31, 2009
PR-09/12

For additional information:
Jason Hammersla
202-289-6700
jhammersla@abcstaff.org

Council lauds IRS defined benefit pension guidance

WASHINGTON, D.C. — “The American Benefits Council commends the Internal Revenue Service for the important regulatory guidance on pension plans provided today,” said American Benefits Council President James A. Klein. “Today’s announcement is welcome news for many employer defined benefit plan sponsors that are facing unprecedented funding obligations as a result of the economic downturn.”

As urged by the Council, the guidance — provided today in a special edition of IRS Employee Plan News — allows companies to uses the spot yield curve (used for measuring pension assets and liabilities) for 2009 without regard to what they used in prior years and clarifies that the yield curve can be used for any “applicable month” rather than the month preceding the plan year (as had previously been suggested in proposed regulations). These rules now conform to the funding procedures required under the Pension Protection Act of 2006.

“In the short run, this guidance will allow many employer plan sponsors to more reasonably measure the value of their pension plan liabilities into the future while continuing to ensure that these plans will be fully funded and provide all promised benefits,” Klein said.

“In the longer view, additional guidance and legislation are still critically needed to prevent this pension funding crisis from causing more job loss, slowing growth and hindering economic recovery. The Council continues to urge lawmakers to consider additional measures to shore up the defined benefit pension system and protect the retirement income security of millions of Americans.

For more information, or to arrange an interview with Council staff, please contact Jason Hammersla, Council director of communications, at jhammersla@abcstaff.org or by phone at 202-289-6700 (office) or (202) 253-5458 (cell).

The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council’s members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.