Senate Unemployment Bill, MAP-21 & Pension Funding

For everyone following the ongoing negotiations over extension of unemployment benefits, the current language would impact sponsors of defined benefit (“DB”) pension plans by lengthening the phase-out period for the pension funding relief under “MAP-21”.  As a sponsor of a DB plan covered by ERISA, this would extend the MAP-21 phase out date from 2018 to 2022 and would serve to reduce minimum required contributions to your plan.  It would not impact your ability to deduct contributions as per the current rules, but would provide relief as it relates to funding requirements.  The bill doesn’t seem to address whether the four (4) year extension would apply to the 80% threshold for benefit restrictions, but it is likely that it would do so in keeping with current practice.

The bill at this point has not been passed by the House nor signed by the President.  However, it is something to watch as a DB plan sponsor as it may impact your pension funding requirements over time.