Thursday, December 11, 2008

Independent Sector, Nonprofits Ask Congress for Pension Plan Funding Relief

Independent Sector and seventy-seven nonprofit organizations have submitted a letter to the U.S. House of Representatives urging Congress to provide transition relief to charities and foundations that offer defined-benefit pension plans to their employees  This request is part of the fallout from two developments: the The Pension Protection Act of 2006, which significantly increased the funding obligations for pension plans; and the recent market decline.  According to the letter, "[t]he abrupt market decline has turned those pension funding obligations into a severe problem never anticipated when the act was drafted."

"Without some immediate help, the pension obligations will force our organizations to divert millions of dollars away from programs at the time they are needed most. We are therefore urging Congress to provide relief to nonprofit organizations and other sponsors of defined benefit pension plans by allowing sufficient time to transition to the Pension Protection Act’s 100% funded target, by allowing flexibility in choosing funding election methods, and by permitting smoothing of the unexpected losses."


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