The U.S. House of Representatives and Senate approved an American Hospital Association-supported bill on Friday that includes changes to pension contribution rules, according to an AHA News Now report.
While pension plan liabilities will continue to be determined based on corporate bond segments — which are based on average interest rates over the past two years — starting with 2012 for minimum funding rules, any segment rate must be within 10 percent of the average segment rate for the 25-year period preceding the current year. By 2016, that number will increase to 30 percent, according to the report.
The pension provision is an effort to stabilize annual interest rate fluctuation, which will result in fewer spikes in interest rates, according to the report.
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While pension plan liabilities will continue to be determined based on corporate bond segments — which are based on average interest rates over the past two years — starting with 2012 for minimum funding rules, any segment rate must be within 10 percent of the average segment rate for the 25-year period preceding the current year. By 2016, that number will increase to 30 percent, according to the report.
The pension provision is an effort to stabilize annual interest rate fluctuation, which will result in fewer spikes in interest rates, according to the report.
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