A pension reform legislation has been sent by Congress to President Bush for his approval in order to start the ending of the defined benefit pension plan under which companies have to offer fixed monthly payments to retired workers.



The new law wants that companies should fund their pension obligations and this would ensure that no longer companies would require promising something rosy, funding less and announcing their plans to be defunct when the bill becomes due. It is expected that the new law would make it easier for converting defined benefit plans to cash balance plans and 401k plans. Also the law would help in making permanent the higher limits on individual retirement account contributions enacted as per the 2001 Bush tax cuts.