OBRA 1987: The Impact of Limiting Contributions to Defined Benefit Plans

摘要

As part of the Omnibus Budget Reconciliation Act (OBRA) of 1987 Congress established a new limit on the deductible amounts that sponsors of defined benefit plans can contribute to the plans. The new limit was expected to raise several billion dollars in tax revenues over 3 years. When OBRA was enacted in 1987, the new limit was not expected to be detrimental to the sound funding of defined benefit pension plans. However, there was not sufficient time to study all of the effects of the new limit. The study examines the expected impact on pension contributions of the OBRA 1987 limit and the resulting impact on levels of pension assets.