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Tax law gives companies reason to check pension funding

Tammy Whitehouse | January 30, 2018

Phones are ringing off the hook at firms that help companies manage their benefit offerings, especially pension plans, after the Tax Cuts and Jobs Act gave companies new incentives to fund up plans.

With defined benefit pension plans trailing in popularity, the new tax law changes don’t do anything to bolster their appeal as a compensation incentive, says Melissa Moore, U.S. annuity placement leader at Mercer. But the changes do give companies reasons to consider funding up the plans they currently have on the books, whether those plans are active or frozen. Companies are already in the throes of considering other changes to executive compensation as a result of the change in tax law.

The lowering of the corporate tax rate from 35 percent to 21 percent...

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