These are lean times for pension funds, and few companies report having more pension money than they need. But some business advocates have nevertheless begun urging Congress to let companies tap any surplus that appears in their pension funds, if and when the good times return.Click here for the entire piece.
"We think there needs to be access to the surplus," said Steven Kerstein, managing director of the global retirement practice for Towers Perrin, a large consulting firm.
A return to "reversions" - the removal of surplus money from pension funds - gives chills to pension rights advocates, who can recall the bitter fights waged over surplus pension money in the 1980's. Companies then had the ability to retrieve excess pension money more freely than now, and pension funds came to be used repeatedly to finance corporate raids - and the raids were often followed by layoffs and other cutbacks. As a result, Congress imposed a 50 percent excise tax on pension reversions in 1990. That was steep enough to make surplus pension money lose its allure.Now consulting firms and business organizations say the excise tax should be lifted, or at least reduced.
Thursday, March 03, 2005
Excess Pension Cash
The New York Times highlights a fight that's brewing (although at a low temperature) about the right to tap excess cash in pension funds.It begins: