Corporate pension funds "have joined the parade of businesses seeking relief from Congress amid this year's economic meltdown," reports Bloomberg News in this story. "Instead of money, they want legislation to suspend a federal law that would make them pump billions of dollars into retirement plans to offset stock-market losses as many struggle to find enough cash just to stay in business. They're pressing Congress to consider the issue this week before this year's session adjourns...
"About 800 companies in the Standard & Poor's 1,500 Index have pension funds, and they were collectively $280 billion short of the sums needed to pay projected benefits as of Nov. 30, according to a study by New York-based benefits consulting firm Mercer LLC."
They don't need this money to cut benefit checks, but to satisfy cash reserve targets under the federal ERISA law, which is designed to make sure pensions are long-term solvent, not pay-as-you-go. The companies are betting that the investment market collapse is temporary. They want a grace period so investment values can go back up and they won't have to shift money from productive activities to pensions. Same problem Mayor Nutter has.
If Congress lets the companies slide, and markets stay weak, we'll be looking at a really mammoth subsidy for the federal Pension Benefit Guaranty Corp., which bails out failed companies' pension plans; and maybe another for towns and states that have pension blow-up worries of their own.