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Part 11 Pension Reform: Legislative History of the Pension Protection Act of 2006 1 (2006)

handle is hein.tera/pnsrfm0022 and id is 1 raw text is: CONGRESSIONAL BUDGET OFFICE COST ESTIMATE Revised September 26, 2005 H.R. 2830 Pension Protection Act of 2005 As ordered reported by the House Committee on Education and the Workforce on June 30, 2005 SUMMARY H.R. 2830 would make changes to the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code (IRC) that would affect the operations of private pension plans. It would do so mostly by changing the funding requirements for tax- qualified, defined-benefit pension plans and the premiums paid to the Pension Benefit Guaranty Corporation (PBGC). The budgetary effects of the bill would result from: * Increased income to the PBGC from premiums paid by the sponsors of pension plans-totaling an estimated $5.1 billion over the next 10 years. * A loss of federal income tax revenue, primarily because more rigorous funding rules would be imposed on plans' sponsors; the Joint Committee on Taxation (JCT) estimates that enacting H.R. 2830 would reduce federal revenues by $5.5 billion over the 2006-2015 period. * Additional benefit payments-totaling an estimated $0.5 billion over 10 years-that the PBGC would have to make as a result of a number of changes made by the bill. In combination, those effects would add $0.8 billion to federal budget deficits over the 2006- 2015 period, CBO estimates. The additional premium income would have another effect: it would increase the balances in the PBGC's on-budget revolving fund and therefore forestall the need for significant transfers to that revolving fund from the PBGC's nonbudgetary trust fund in order pay insured benefits. Because those transfers are treated in the budget as offsetting collections (that is, offsets to outlays), smaller transfers would result in higher net outlays for PBGC's on-budget revolving fund. The improvement in the financial condition of that fund would eliminate the need for $5.7 billion in transfers to the fund from 2013

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