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Pension reform legislation enacted with GATT trade package affects funding requirements
Author(s) -
Davis Jeff,
Young Gretchen
Publication year - 1995
Publication title -
journal of corporate accounting and finance
Language(s) - English
Resource type - Journals
eISSN - 1097-0053
pISSN - 1044-8136
DOI - 10.1002/jcaf.3970060408
Subject(s) - surety , legislation , pension , lump sum , internal revenue , corporation , business , revenue , liability , finance , actuarial science , economics , payment , law , political science , marketing , service (business)
Changes to pension law contained in last year's GATT trade legislation may have a substantial impact on employers with underfunded pension plans. Many employers will face an increase in their annual funding requirements. Some may wish to consider accelerating contributions to these plans to avoid paying increased premiums to the Pension Benefit Guaranty Corporation (PBGC) as well as to avoid the need to notify participants that their plan is underfunded. All employers with defined benefit plans will need to modify the method by which they calculate lump sum distributions, both in terms of the minimum amounts they are required to pay and the maximum amounts they may pay within the limits of Section 415 of the Internal Revenue Code.