Tax reform offers incentive for companies to accelerate pension contributions
ByMilliman Employee Benefits Research Group
23 March 2018
Tax reform offers incentive for companies to accelerate pension contributions
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.