Pension Tension

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President Bush signed a new pension law on August 17, but it may have been too little, too late for defined benefit pensions. Earlier in the month, an appeals court blessed IBM's effort to shift its pension into a cash-balance plan. That was hailed as good news for company executives, who were already reacting strongly against FASB's proposed approach to overhauling accounting for traditional pension plans. That project is still in the works, but will it matter? Just two weeks after the new pension law passed, Dupont announced major cuts to its defined benefit pension plan, a move that many more may follow.

FEATURE ARTICLE
Pension Dissension
FASB gets an earful as CFOs protest key details of pension-accounting reform.


PENSIONS IN THE NEWS, AUGUST 2006
DuPont Plans Pension Cuts
DuPont reduces defined pension plan benefits, expects future earnings improvement.
Tenneco Freezes Pension Plan
The move affects more than 5,000 workers.
Multi-employer Pensions May Pose Credit Risks
Some companies may face downgrades as a result, says Moody's.
Moody's Cites Effects of New Pension Law
Moody's contends that companies with poorly funded plans may start to redirect cash flows into pensions to avoid having plans deemed "at risk."
Bush Signs Pension Bill
The long-awaited penion reform becomes law, reportedly shielding taxpayers from the risk of paying the price for corporate underfunding.
GM Cuts Benefit, Pension Cost Estimates
The auto giant reports that it's reducing its previous expense forecasts because 34,400 U.S. hourly workers took buyouts and early retirement offers.
Court: IBM Pension Plan Not Discriminatory
On the heels of Congress's new pension law, a court rules that IBM's cash-balance pension plan did not discriminate against older workers.

MORE RECOMMENDED READING ON PENSIONS
FASB, Employers Clash on Pension Metric
Corporations don't like to estimate future employee salary hikes.
Pension Plans Disappearing
A new study shows the number of Fortune 1000 companies that have frozen or terminated a defined benefit pension plan has more than tripled since 2001.
In California Bill, Pensions Trump Dividends
Legislation would give preference to employees and retirees over shareholders.
Congress, FASB Grappling with Pensions
The Senate and House must reconcile their retiree-benefit funding bills and meld the result with a major pension-accounting proposal.
Execs' Letters Rip FASB Pension Draft
The proposed statement by the accounting board could upset companies' annual budgeting and create chaos at year's end, employers contend.
Pension Funds Sue UnitedHealth
In the latest fallout over option grant timing, two large pension funds in Ohio are suing UnitedHealth, charging that CEO William McGuire "retroactively select[ed] the date on which options were granted."
Aloha Says Goodbye to Pensions
Aloha Airlines becomes the latest carrier to slough off its pensions in bankruptcy.
Pensions and the Pecking Order
A probe of Northwest Airlines brings bankrupt companies' retirement-funding duties into sharper focus.
FASB Pension Rule Could Spur Loan Woes
If a proposed pension standard had been around in 2005, 100 big companies would have added a total pre-tax charge to shareholder equity of $222 billion, a new study finds.
Poll: CFOs Welcome FASB Pension Proposal
Most finance executives say that benefit funding should appear on the balance sheet, a new survey finds.
Q&A: Pensions on the Brink
Bradley Belt, the nation's departing pension insurance chief, holds forth on the need for transparency, the elimination of smoothing, and the flaws in Congress's reform legislation.
FASB: Put Pension Status on the Balance Sheet
The board takes the first step in its purported overhaul of the current retiree-benefit accounting system.
System Freeze for Unisys Pensions
The struggling provider of information technology services announced that beginning next year, it will stop accruing future benefits to its defined-benefits plans and will close them to new participants.
Cash Squeeze Means Pension Freeze
A new study says finance chiefs will freeze retirement benefits if they cut into buybacks, capital spending, or other priorities.

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