USA – Tax reform offers incentive for companies to accelerate pension contributions

Milliman Employee Benefits Research Group |  23 March 2018

The enactment of the Tax Cuts and Jobs Act (TCJA) at the end of 2017 reduced the corporate tax rate from 35% to 21%.

Although the TCJA contained no provisions directly affecting defined benefit plan funding or maximum deductibility, its corporate-rate reduction produces an incentive for pension plan sponsors to accelerate their contributions, thereby maximizing the tax effectiveness of the deductions for the 2017 plan year.