Max Baucus: “I am delighted that the surface transportation bill that we just passed includes a very important provision that will…”

“I am delighted that the surface transportation bill that we just passed includes a very important provision that will help to stabilize the level of contributions that employers will have to make to their defined benefit pension plans. When I talk with employers in Montana and throughout the country, one of the biggest drawbacks they cite for sponsoring a pension plan for their employers and the biggest reason most employers decide not to sponsor a plan is the inability to predict how much it is going to cost. Employers have to make a guess as to how much their benefits will be in future years, discount that value to the present, and make a contribution today that will meet that obligation. This is all in addition to guessing other variables, such as how long their employees will work for them and how long they will live after retirement. We all worked hard in 2005 and 2006 to develop pension funding rules that work, so that assets will be in the plan to meet the employer's promise to its employees. However, the Pension Protection Act of 2006 did not, and could not, account for the unforeseeable slide in asset values in 2008 and now the historically low interest rates that employers have to use in valuing their obligations.…”