Wall Street’s meltdown has diminished the value of US pension funds by $250 billion and cash-strapped companies are asking lawmakers to give them relief from rules that require them to make up the losses, reports the New York Times. The rules, designed to strengthen the pension system in the US, were signed into law by President Bush in 2006.
Congress appears inclined to go along with the relief, even though it’s no guarantee struggling companies won’t go belly up anyway, adding to the burden of the government’s Pension Guaranty Corporation, which insures private plans and provides reduced benefits. “Congress needs to make the funding less volatile,” said Rep. Earl Pomeroy, D-ND. “This step will save thousands of jobs without costing the Treasury anything.”