For years, companies feasted on absurd accounting rules that allowed them to book pension surplusses as earnings. Now that times have changed, of course, they want a bailout.
Specifically, they want the rules changed so they don’t have to keep funding your pension. And why not? If they cry loudly enough, maybe they’ll save a few bucks before their pension plans go bust and they just offload them on taxpayers.
According to the New York Times, Congress is “receptive” to the pension-obligation bailout idea. So get ready for another huge bailout.
(This, of course, is the moment in which pension funds should be elbowing each other out of the way to invest more money: Stocks have been clobbered, which means future returns should be high. Under this latest bailout, however, companies will try to starve their plans until stocks recover, at which point they’ll start channeling money into them again).
NYT: Stung by outsize investment losses, some of the nation’s biggest companies are pushing Congress to roll back rules requiring them to put more money into their pension funds, just two years after President Bush signed a law meant to strengthen the pension system.
The total value of company pension funds is thought to have fallen by more than $250 billion since last winter. With cash now in short supply for companies, they are asking Congress to excuse them from having to replenish the required amounts.
Lawmakers from both parties seem receptive to the idea, and there was talk of adding a pension relief provision to the broad fiscal stimulus package Congress considered for this week’s lame-duck session.
Late Wednesday, several senators announced that they had reached agreement on a bill that would provide pension relief. Even if it is not completed this week, some Congressional leaders say they will seek support for a pension relief bill in January.
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