Employer groups oppose pension fees in budget deal

[Omaha Steve]

Source: AP-Excite

By SAM HANANEL

WASHINGTON (AP) - Employers that still offer workers traditional pension plans are in line for hefty insurance premium increases under the budget agreement struck in Congress, the second time in two years that lawmakers have turned to them to help finance spending deals.

The basic annual government-charged premium for pension insurance already was scheduled to rise from $42 for each covered worker in the private sector to $49 in 2014. The new budget agreement would raise that premium to $57 in 2015 and again to $64 the following year.

The U.S. Chamber of Commerce and National Association of Manufacturers support the overall deal, yet they and other business groups warn that the fees will have a negative impact.

"It only provides another reason for sponsors to exit the system, thus further harming retirement security and the participants the system is intended to help," said Scott Macey, president of the ERISA Industry Committee, a group that represents large employers on benefits issues. ERISA is an acronym for Employee Retirement Income Security Act.

FULL story at link.


Read more: http://apnews.excite.com/article/20131218/DAAOLROO2.html

[dipsydoodle]

1. At the risk of asking a totally daft question

why do employers have to pay anything at all to the government for offering a traditional pension plan?

[Angleae]

2. Probably pension insurance to the Pension Benefit Guaranty Corporation.

The Employee Retirement Income Security Act set up the Pension Benefit Guaranty Corporation to "insure benefits of participants in underfunded terminated plans."

http://en.wikipedia.org/wiki/Employee_Retirement_Income_Security_Act

[dipsydoodle]

3. Thanks

We have no direct equivalent in the UK.