One-time payouts can reduce the “drag” that pension obligations have on a company's balance sheet, as well as get rid of the extra premiums companies must pay to the Pension Benefit Guaranty Corporation if they're underfunded. (Photo: iStock)
(Bloomberg) – Companies are free to tackle their hefty pension obligations through a controversial method involving one-time, lump-sum payouts to retirees and beneficiaries, the Treasury Department says.
That could help companies like General Electric Co., now struggling with a nearly $30 billion shortfall in its defined-benefit pension plan.
The notice issued Wednesday says that the agency doesn't plan to follow through on a 2015 pledge, made during the Obama administration, to formally outlaw the method.
Continue Reading for Free
Register and gain access to:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.