Pension Rights Center Asks Senate HELP Committee to Provide Funding Relief for Companies that Continue Workers’ Pensions

Pension Rights Center Asks Senate HELP Committee to Provide Funding Relief for Companies that Continue Workers’ Pensions

WASHINGTON – Congress should make short-term emergency funding relief available for companies that continue their workers’ pension plans, the Pension Rights Center told lawmakers today.  Testifying on behalf of the Center before the Senate Committee on Health, Education, Labor, and Pensions, Center Executive Vice President and Policy Director Karen Friedman recognized the economic hardships that companies are facing, but urged the panel to keep the interests of workers in mind when considering pension funding relief.

“In today’s devastated economic environment, we have seen how important defined benefit plans are to the security of American workers and their families,” said Friedman.  “Helping companies to continue their ongoing defined benefit plans is an important part of the economic recovery process…The Pension Rights Center supports providing emergency funding relief to companies that have done the right thing, and have continued to maintain ongoing defined benefit plans – as long as the relief is conditioned on certain critical protections for employees.”

In her testimony, Friedman urged Congress to take the following actions:

1. Make short-term emergency funding relief available to companies that:
   1. Agree that workers’ will continue to earn benefits under their traditional pension plans throughout the relief period; and
   2. Stop making contributions to their deferred compensation plans for executives during the funding relief period.
2. Deny automatic funding relief to companies with frozen plans, except under specific circumstances.
3. Repeal a provision of the Pension Protection Act of 2006 (PPA) that says that workers cannot earn new pension benefits if their plans’ funding goes below a specified level.
4. Repeal the PPA provision that designated the date a company enters bankruptcy as the plan termination date, rather than the date that the pension plan is actually terminated.
5. Increase the benefit amounts guaranteed by the PBGC for workers in multiemployer plans.
6. End the ability of employers to modify their workers’ pension plans to create enhanced benefits for select executives.

“The economic meltdown of the last year has shown the tremendous value of defined benefit plans to employees and retirees,” said Friedman.  “Congressional response to the economic crisis should be to help ensure the survival of existing defined benefit plans and to stand by those companies that stood by their defined benefit plans in an era when too many companies abandoned them.”

Read the Pension Rights Center’s testimony.

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Contact Name: Nancy Hwa
202-296-3776