That would directly benefit Delta Air Lines and Northwest Airlines Corp., although two others with active defined-benefit plans, American Airlines and Continental Airlines Inc., would be eligible for the same break if they decided to freeze their plans. Otherwise they would get 10 years - the seven plus an extra three - to reach full funding after the new rules go fully into effect in 2008.
Northwest, in a statement, said the bill "will save the pension benefits of 73,000 current and former Northwest employees."
"The winners are tens of thousands of employees in the airline industry, confronted within the next 30 to 60 days with the loss of up to 70 percent of their pensions with them going on the back of the PBGC," said Sen. Johnny Isakson, R-Ga., a leading advocate of the airline provision. Delta is based in Georgia.
Critics of the legislation said that it does little to reverse the trend of employers dropping defined-benefit plans in favor of less secure defined-contribution plans such as 401(k)s.
"Except for the helpful relief for airlines and multiemployer plans, the new funding regime for most companies will inject more unpredictability into their pension financial obligations," said James Klein, president of the American Benefits Council, which represents companies with defined-benefit plans.
But the bill also won praise for encouraging Americans, particularly young workers, to save for their retirements through such steps as allowing the automatic enrollment of workers into 401(k) plans.
The bill also:
_Makes permanent provisions in a 2001 tax cut law that raised annual contribution limits for IRAs.
_Ends the legal uncertainty surrounding cash balance pension plans, which have run into legal challenges from employees who have claimed that older workers lose out when employers switch from traditional defined-benefit plans.
_Permits qualified financial firms that manage investment firms to offer face-to-face investment advice to help employees manage 401(k) and other retirement options.
The bill is H.R. 4
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Lawmakers singled out financially struggling airlines when drafting the new rules.
The legislation gives special repayment breaks to the airline industry.
The 279-131 vote came only hours before the House was expected to begin a five-week summer break.
The bill, passed 93-5, will help financially troubled Delta Air Lines and Northwest Airlines.