The News Media Alliance applauds the passage today of the American Rescue Plan Act of 2021 (H.R. 1319) – the $1.9 trillion stimulus package proposed by President Joe Biden – by the U.S. House of Representatives. The Senate approved the bill on Saturday. The legislation contains important pension relief that benefits community newspapers as well as pension stabilization for single-employer pension plans. View the pension relief provisions in the bill here (single employer) and here (community newspaper).
The Alliance worked with the House and Senate on these provisions. Representative Richard Neal (D-MA), Chairman of the House Ways and Means Committee and Senator Patty Murray (R-WA), Chairwoman of the Senate Health, Education, Labor and Pensions Committee, were instrumental in their support of the inclusion of these provisions.
News Media Alliance President & CEO, David Chavern, stated, “We are very pleased that these pension relief provisions were included in the COVID-19 relief and economic stimulus package – they will provide newspapers with the flexibility to manage their pension plans over the long-term while continuing to invest in local journalism that their readers have come to expect. News publishers were already struggling before COVID-19 made itself known, and yet as our country has been fighting the pandemic for the past year, journalists have been working tirelessly to bring important news and information to their communities to help them stay safe and informed. We thank Chairman Neal and Chairwoman Murray for their leadership in shepherding these pension provisions and for their dedication to preserving high-quality local journalism.”
The American Rescue Plan Act contains changes to the “community newspaper” provision that was passed in the SECURE Act in 2019 that allows community newspapers with defined pension plans to increase the interest rate used to calculate funding obligations to 8 percent and provides for a longer amortization period for pension shortfalls from seven to 30 years. The changes will provide relief to several independently owned newspapers that were excluded from the relief because of definitional issues but should have qualified given the intent of the provision.
As it has in the past when our economy has faced a shock to its system, Congress made changes to single employer plans allowing plan sponsors to use a 25-year interest rate average or “interest rate smoothing” in determining future obligations, and allows funding shortfalls to be spread out over a 15-year amortization period. These provisions address concerns that historically low interest rates were creating inflated pension funding obligations and that the current COVID-19 crisis would force companies to spend revenues on longer-term pension obligations instead of putting assets toward maintaining and creating jobs in a volatile economic environment.