Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the S420 Investments topic
No spam. Unsubscribe anytime.
Committee unanimously approves expanding investment options for certain retiree benefit trusts
Summary
S.420 would allow qualified retiree post-employment benefit trusts to invest in investment-grade corporate debt; committee amended phrasing to use 'investment grade' and approved the change unanimously.
The committee unanimously approved a subcommittee amendment to S.420, which expands authorized investments for certain legacy retiree post-employment benefit trusts to include notes, bonds, debentures or other debt instruments issued by U.S. corporations, provided the instruments are investment grade.
Staff said the change is targeted: many legacy pension plans are limited to very short-term, low-yield products. The bill would permit greater conservatively-risked investment options (investment-grade corporate or government bonds) while stopping short of allowing equities. The amendment replaced the phrase 'rated in general rating categories by no fewer than two nationally recognized credit rating organizations' with the clearer term 'investment grade.'
The sponsor of the amendment said the revision uses a standard marketplace term ('investment grade') that practitioners understand and that it will modestly expand the universe of investable assets in these plans without exposing them to high volatility. The amendment was moved, seconded and adopted by unanimous vote; the committee recorded unanimous approval for the item.
Next steps: the amendment will be carried to the calendar for floor consideration.
