President Donald Trump’s promises to cut corporate taxes and ease companies’ ability to repatriate overseas cash could help corporate and public pensions close their massive deficits, the Wall Street Journal reported today. Investor enthusiasm over the president’s tax proposals is already boosting stocks, benefiting public pension plans. The S&P 500 index has jumped more than 9 percent since November 9, as investors anticipate more growth from Mr. Trump’s policies. Should Congress and the White House overhaul the tax code, lowering corporate rates from the current 35 percent, many companies could accelerate payments into their pensions plans, said Gordon Fletcher, a partner at Mercer Investment Management Inc. Pension contributions are tax deductible, so companies could lock in higher deductions before new, lower rates kick in, he said. Congressional Republicans are proposing to cut the corporate tax rate from 35 percent to 20 percent. So a company that accelerates a $1 million pension payment and makes it before the rate cut takes effect would reduce its tax bill by $350,000 instead of $200,000.
