Pension Action E-Newsletter

March 2, 2007

More Companies Freeze or Convert Their Pension Plans
FedEx, Goodyear Tire & Rubber Company, SunTrust and Hewlett-Packard have been added to PRC’s list of companies that have announced plans to make significant changes to their traditional defined benefit pension plan. These changes include pension plan freezes and conversions to cash balance plans as well as other changes that leave workers with significantly-reduced benefits. To find see what other companies have announced changes, read PRC’s list of companies that have made changes to their defined benefit pension plans.

Executive Compensation at Issue in Minimum Wage Bill
A provision in the Senate minimum wage bill limits the amounts that can be paid to executives in certain types of retirement arrangements. The bill, S. 349, “The Small Business and Work Opportunity Act” limits the amount of executive compensation payable to company executives to either $1 million or their average pay for their last five years of service, whichever is less. The House and Senate minimum wage bills are currently being reconciled by a Conference Committee. We’ll keep you posted on its status.

Executive compensation has been a hot issue for shareholders at many large companies. Employees have wondered why their benefits have been cut while the benefits of company executives have steadily increased over the years. Business groups oppose limitations on executive compensation and are lobbying hard to strike this provision from the bill. If you would like to have your voice heard on the issue of executive compensation, use PRC’s guide on contacting Members of Congress to weigh in with the members of Congress who represent you.

House Hearing on 401(k) Fees
Next week the House Committee on Education and Labor will hold a hearing on 401(k) fees.  According to Committee Chairman George Miller (D-CA-7), the hearing will examine whether hidden fees on 401(k) plans are eating into workers’ retirement savings. The hearing, which will be held Tuesday, March 6, 2007 at 10:30 a.m., will feature testimony from the Government Accountability Office and 401(k) fee experts.

Articles of Interest

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