President Obama signs pension funding relief legislation

WASHINGTON, DC, June 25, 2010 – Legislation to provide relief to pension plans under financial stress was signed into law this morning by President Barack Obama.

Called “The Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010” (HR 3962), the legislation will provide much-needed help to pension plans that suffered losses as a result of the recent recession, including the NYSNA Pension Plan and single employer plans in other NYSNA represented facilities.

Under the legislation, eligible pension plans are able to lengthen the period in which they can amortize losses. Prior federal law required such losses be amortized over seven years. The new law will give plans three options:

Amortize losses suffered during two of the years between 2008-2011 in equal annual installments over 30 years.
Smooth losses suffered in 2008 and 2009 over 10 years.
Increase the asset valuation corridor to 130% for two years.

Plans taking advantage of this relief are prohibited from improving benefits – other than if they are fully funded by new contributions – for two years after the relief is in effect. To be eligible, a plan must pass a specified solvency test that requires the plan’s actuary to certify the plan is projected to have sufficient assets to cover 30 years of benefit payments.

NYSNA Pension Plan actuaries are in the process of evaluating the details of the law in order to inform Pension Plan trustees of its exact benefit.

“This is a tremendous legislative victory, a victory to which numerous members of NYSNA and our national union, the National Federation of Nurses, contributed by making lobbying visits, sending letters, making phone calls, signing postcards and sending e-mails and faxes. All of these efforts led to this success,” said Nancy Kaleda, special projects manager for NYSNA’s Economic and General Welfare program.

Kaleda cautioned that more work is needed in the next several months because this legislation isn’t as comprehensive as the bill that pension protection advocates had sought. “There are some technical clarifications that we will need to work out. This could occur as a new bill being passed containing technical corrections or as guidelines and regulations developed by the IRS and the Treasury. Remember, we have always said that legislative relief will not fix all of our problems, but it will definitely help us.”

“This is a national legislative victory nurses should be proud of,” said Lorraine Seidel, RN, director of NYSNA’s Economic and General Welfare program. “NYSNA partnered with the National Coordinating Committee for Multi-Employer Plans and our voices were heard at the national level. We’re grateful to all coalition members for their hard work.”

The New York State Nurses Association is the voice for nursing in the Empire State. With more than 36,000 members, it is the state's largest professional association and largest union for registered nurses. It supports nurses and nursing practice through education, research, legislative advocacy, and collective bargaining.

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