The Restoring Pension Promises to Workers Act of 2007 would protect certain early retirement pensions when companies sell divisions and employees continue working for the new owner.
Current law protects the portion of a subsidized early retirement benefit that an employee has earned at the time a company changes or terminates its plan if the employee continues to work for the company and later completes the requirements for the benefit. Upon retirement workers receive a pro rata share of the benefit they had earned up until the plan was amended or stopped if they collect the pension as lifetime monthly payments. However if, instead of changing or stopping the pension plan, a company sells a division, employees can lose the already earned portion of their subsidized early retirement benefits even if they continue to work at the same desk on the same job. This is because at the time that they meet the age and service requirements for the special early retirement benefits they will no longer be “employees” covered by their former employer’s pension plan.
The provision would provide that workers continuing in their same jobs after their divisions have been sold, would be treated the same way as employees whose plans have been changed or stopped. If they continue working for the new owner, and later meet the requirements for special unreduced early retirement benefits, they would receive the portion of the special benefits they had earned as of the date of the sale.
Read Section 103 of the Restoring Pension Promises to Workers Act of 2007 (S. 1725) [PDF].< Back