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.
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