Pension Security and Transparency Act of 2005

The Pension Security and Transparency Act of 2005 was designed to strengthen the private pension system by requiring employers to more accurately measure and fully fund their "defined benefit" pension plans. It established stricter rules for how companies calculate their pension liabilities and required underfunded plans to close those gaps over a seven-year period.

For everyday citizens, the bill aimed to protect retirement savings by increasing the insurance premiums companies pay to the Pension Benefit Guaranty Corporation (PBGC) and limiting a company's ability to offer new benefits if their current plan is significantly underfunded. Additionally, the legislation introduced new disclosure requirements, ensuring workers receive more frequent and transparent information about the financial health of their specific pension plans.