Skip to comments.Looking for Cash, Congress Finds Some ($20 billion) in a Corporate Pension Rule Tweak
Posted on 07/01/2012 4:47:52 PM PDT by Libloather
Looking for Cash, Congress Finds Some in a Corporate Pension Rule Tweak
By MARY WILLIAMS WALSH
Published: June 28, 2012
Lawmakers looking for money to finance low-cost student loans and fix aging highways have found about $20 billion in an unlikely place: company pension funds.
Pension funds are not exactly brimming over with extra money. In 2006, Congress was concerned enough about bolstering them to pass legislation closing loopholes and making companies set money aside more quickly.
But the highway bill that Congress is rushing to complete by Friday contains a measure that would let companies slow their pension contributions again. Because the contributions are tax-deductible, permitting smaller contributions would mean that companies take fewer tax deductions and as a result, create more federal revenue.
(Excerpt) Read more at nytimes.com ...
(And to think - Hussein put five TRILLION on a credit card.)
These are private pension plans. Don’t think your 401Ks are safe either, they aren’t.
Wait till they cast their greedy eyes upon our IRA AND 401K accounts.
Yep, it won’t be long until some genius comes up with a proposal to “pre-pay” income taxes charged on 401K withdrawals.
There was a similar article about this in the WSJ a day or two ago.
The key item isn’t that Congress exacted a tax—it’s the funny book-keeping. Everyone knows that corporate pension plans are by and large underfunded. Many corporations wished to bolster them.
But, when a corporation contributes to a pension plan, that money is deducted from income. By saying the corporations could be less conservative in providing for their plans, Congress was forcing the funds they would have stashed in the plans to be counted as income, where they would be taxed.
So, the road bill was paid for in part, by forcing companies to put their pension plans at additional risk of failure (when we will pay for them through the Pension Guaranty Benefit Corp with our taxes), so Congress could squeeze a little tax money out of them. A typical accounting gimmick, increasing obvious long-term risk.
Great, it’ll run the US for like what? Seven days? Your 401k’s are now 201k’s ... soon to be 101k’s ...