On Friday, May 8, 2009, SHRM, along with 209 other associations and individual businesses sent a letter to the Treasury Secretary Timothy Geithner asking the Treasury Department to make regulatory changes that would provide additional flexibility to organizations struggling to fund their retirement pension plans in today’s economic climate.
U.S. Treasury Secretary Timothy Geithner
The Pension Protection Act of 2006 (P.L. 109-280) contains new minimum funding requirements for pension plans beginning in “plan year” 2008, however, the Treasury Department has delayed the applicability of these rules for an additional year. Instead, Treasury issued guidance that allows plans to use the full yield curve for any applicable month with respect to any plan years beginning before January 1, 2009.
Despite the Treasury Department’s guidance, the SHRM letter points out that more challenges lie ahead. Specifically, plans with non-calendar year plan years may face funding burdens and, if the market does not fully recover by the end of year, plans across the country could face 2010 funding obligations far greater than those in 2008 or 2009.
SHRM is seeking two critical temporary steps from the Treasury Department:
1) Permit companies to make new interest rate elections for plan years beginning in 2010; and
2) Make funding regulations effective for plan years beginning in 2010, providing an additional year for the national economy to recover.
To read a copy of the letter to Treasury Department, click HERE.