Congress has voted to ease pension-funding requirements and excuse older retirees from having to cash out retirement funds in an attempt to blunt the recession’s impact on their savings.
The Senate approved legislation Thursday by unanimous consent to eliminate various penalties on companies whose pension funding falls below federal guidelines. The bill would also temporarily suspend requirements that people age 70 1/2 begin cashing out assets in individual retirement accounts and 401(k) and 403(b) savings accounts.
“This vital legislation addresses the immediate needs of workers, retirees and businesses hit hard by the financial and economic crisis facing our country,” said Sen. Edward Kennedy, D-Mass. “With trillions of dollars in retirement savings in serious jeopardy, the relief in this bill will help Americans weather the storm until the economy begins recovering.”
The vote, one day after the House approved the plan, sends the measure to President George W. Bush. White House spokesman Tony Fratto declined to say whether Bush would sign the bill into law.
“We continue to have concerns about measures to reduce funding for worker pensions,” Fratto said in an e-mail.
Hundreds of companies petitioned Congress to relax the pension rules, saying the economic slowdown has slashed the value of assets in the accounts, which could force businesses to make unexpectedly large contributions to meet federal minimums.
