On Friday, President Obama signed into law the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act (H.R. 3962), (pdf) legislation commonly known as the “doc fix” bill. This measure reverses a 21 percent payment cut for doctors in Medicare and TRICARE, updates the physician payment formula through November 30, 2010, and provides temporary, targeted funding relief for single employer and multiemployer pension plans that suffered significant losses in asset value due to the 2008 financial downturn. On Thursday, the House of Representatives overwhelmingly approved this measure by a 417-1 vote. The Senate cleared this bill last week after the larger tax extender bill failed to gain sufficient support.

With respect to the pension funding relief provisions, according to a summary (pdf) of the bill, “[e]mployers that elect the relief would be required to make additional contributions to the plan if they pay compensation to any employee in excess of $1 million, pay extraordinary dividends, or engage in extraordinary stock buybacks during the first part of the relief period. Additional relief is available to certain plans sponsored by charitable organizations.”

As outlined in the legislation, single employer plan funding relief measures include: extended period for single employer defined benefit plans to amortize certain shortfall amortization bases; application of an extended amortization period to plans subject to prior law funding rules; lookback for certain benefit restrictions; and lookback for credit balance rule for plans maintained by charities.

Multiemployer plan funding relief measures include adjustments to funding standard account rules, such as expanded “smoothing” periods for losses incurred during the period of economic decline; and modification of certain amortization extensions under prior law, among other provisions.