As ordered reported by the Senate Committee on Health, Education, Labor, and Pensions on July 23, 2014
Section 4062(e) of the Employee Retirement Income Security Act of 1974 (ERISA) requires sponsors of single-employer defined benefit pension plans to make financial assurances (such as providing a letter of credit, a lien on land, or additional contributions to the plan) when they have a “substantial cessation.” Current law defines that term as a cessation of operations at a facility resulting in a 20 percent reduction in the number of employees who participate in the employer’s pension plan. S. 2511 would change the definition of substantial cessation and would establish a new alternative way for employers to satisfy the 4062(e) liability.
CBO estimates that S. 2511 would reduce the contributions that plan sponsors are required to make to their plans as a result of terminating operations, leading to increases in revenues and decreases in direct spending (including the effects on offsetting receipts, which are recorded as an offset to direct spending).
CBO estimates that enacting S. 2511 would, on net, decrease direct spending by $15 million over the 2015-2024 period. The staff of the Joint Committee on Taxation (JCT) estimates that enacting the bill would increase revenues by $14 million over the 2015-2024 period. In total, CBO and JCT estimate that enacting S. 2511 would reduce deficits by $29 million over the 2015-2024 period.
Pay-as-you-go procedures apply because enacting the legislation would affect direct spending and revenues. The bill would not affect discretionary spending.
S. 2511 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act.
