Legislation before the U.S. House of Representatives would extend a provision in prior pension reform allowing over-funded pensions to use their excesses to fund retiree health and life insurance benefits.
The Moving Ahead for Progress in the 21st Century Act (MAP-21), passed in July 2012, included a provision extending the ability of employers to transfer excess pension assets to fund retiree health benefits and expanding the provision to allow transfers for retiree life insurance. H.R. 3038, the “Highway and Transportation Funding Act of 2015,” would extend the time period for using these excess assets from 2021 to 2025 to pay for retiree medical accounts and retiree life insurance.
The ERISA Industry Committee (ERIC) issued a statement urging the House of Representatives to pass the legislation this week. ERIC said that, for companies with over-funded pension plans, the ability to use these excess assets to pay for important retiree benefits is crucial to funding these significant benefits. The retiree life insurance benefit is particularly important for surviving spouses of workers who have retired from a company.
ERIC President and CEO Annette Guarisco Fildes said: “Companies see this provision as critical to enabling them to offer vital health and life insurance benefits to their retirees and surviving spouses. We urge the House to pass the highway bill with this important protection for employee benefits.”