A Pension ‘Fix’ That Isn’t

A Pension ‘Fix’ That Isn’t

Embedded in the $10.8 billion Highway Trust Fund measure that the House passed Tuesday in an overwhelmingly bipartisan vote, 367 to 55, is a funding gimmick called “pension smoothing.” This mechanism, first used in a 2012 transportation bill, allows companies to temporarily defer contributions to employees’ defined-benefit pension plans. Companies save money in pension contributions and pay more in taxes up front, temporarily increasing federal revenue. But when companies eventually make up the missed pension payments, plus interest, tax revenue declines.
Please click here to read the full article.