LAT: Fixes for Retirees' Safety Net Weighed

[DeepModem Mom]

Fixes for Retirees' Safety Net Weighed
By Jonathan Peterson and Kathy M. Kristof, Times Staff Writers


WASHINGTON — The nation's safety net for private pensions, newly saddled with billions of dollars in costs for United Airlines retirees, would face major changes under proposals that Congress is expected to consider in a bid to stabilize the beleaguered system.

Corporate pension plans are bracing for a significant hike in the premiums that they pay to the Pension Benefit Guaranty Corp., a government-sponsored insurer whose latest reported deficit is $23.3 billion. Companies with the shakiest pension financing would face especially steep increases under a plan being pushed by the Bush administration.

United is just the latest in a long line of distressed corporations that have been unable to fully fund their pension plans in recent years — weighing down the government with costly obligations and raising at least the possibility of a future bailout for the pension insurance agency.

Lawmakers also may decide to change the way companies calculate their long-term pension costs, a matter that could affect the willingness of many healthy companies to continue offering these benefits....

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....as Congress moves closer to tackling the long-term problems of the pension system, lawmakers confront a dilemma: The strong medicine that might cure ailing pension plans could also prove distasteful to many companies, which can choose to freeze or terminate their programs....


http://www.latimes.com/business/la-fi-pension16may16,0,6454782.story?coll=la-home-business