WASHINGTON -(Dow Jones)- A pension funding break successfully sought by American Airlines earlier this year would be pared back under legislation introduced Thursday by Senate Finance Committee Chairman Max Baucus, D-Mont.
The legislation wouldn't repeal the break entirely, but it would substantially curb relief for companies with pension plans in which beneficiaries are still accruing benefits, said Baucus and several aides familiar with his legislation.
Specifically, Baucus's legislation would allow those companies to get a funding break for pension benefits already earned, but the break wouldn't reduce payments covering the cost of benefits accruing in the future, according to a Senate Finance Committee aide.
The legislation is part of a broader transportation bill being debated by the Senate Finance Committee.
The pension funding break Baucus is modifying was inserted, over his objections, into a must-pass $95 billion war-time spending bill by Senate Democratic leaders this spring.
The funding break was sought by AMR Corp. (AMR), parent of American Airlines, and Continental Airlines Inc. (CAL).
Alaska Airlines, a unit of Alaska Air Group Inc. (ALK), and some airline food service plans could also benefit from the pension funding break, though the bulk of the potential benefit would go to American, according to a source familiar with the legislation.
The Pension Benefit Guaranty Corp. has estimated that the pension funding break could allow the affected companies to reduce their pension contributions by $2 billion over the next decade, the source said.
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The legislation wouldn't repeal the break entirely, but it would substantially curb relief for companies with pension plans in which beneficiaries are still accruing benefits, said Baucus and several aides familiar with his legislation.
Specifically, Baucus's legislation would allow those companies to get a funding break for pension benefits already earned, but the break wouldn't reduce payments covering the cost of benefits accruing in the future, according to a Senate Finance Committee aide.
The legislation is part of a broader transportation bill being debated by the Senate Finance Committee.
The pension funding break Baucus is modifying was inserted, over his objections, into a must-pass $95 billion war-time spending bill by Senate Democratic leaders this spring.
The funding break was sought by AMR Corp. (AMR), parent of American Airlines, and Continental Airlines Inc. (CAL).
Alaska Airlines, a unit of Alaska Air Group Inc. (ALK), and some airline food service plans could also benefit from the pension funding break, though the bulk of the potential benefit would go to American, according to a source familiar with the legislation.
The Pension Benefit Guaranty Corp. has estimated that the pension funding break could allow the affected companies to reduce their pension contributions by $2 billion over the next decade, the source said.
Source/Full Story LINK
