Pension Funding Reform: It's Time to Get the Rules Right (Part 1)

Abstract:     
In this two-part article, the author explains how and why ERISA's historical pension funding rules - although well-intentioned - nevertheless led employers, such as United Airlines' parent UAL Corp., to have seriously underfunded pension plans, and the Pension Benefit Guaranty Corp. to assume billions of dollars of those unfunded liabilities. Before future pension reform measures should be considered, Kennedy believes that we should learn from the past. Mistakes created through legislative rules should not be repeated, but instead their lessons should help forge effective pension funding reforms.

The second part of the article will discuss various legislative proposals pending before Congress and the policy considerations relevant to those proposals, in light of the historical mistakes that should be avoided in impending legislation.

Accepted Paper Series