601 Pennsylvania Avenue,
Board of Directors:
A. J. (Jim) Norby
Media Relations Director:
October 17, 2007
The Honorable Edward Kennedy, Chairman
Dear Senator Kennedy:
The leaders of the 17 retiree associations affiliated with the National Retiree Legislative Network have read with grave concern the news reports that some financial firms are attempting to clear a regulatory path that would allow them to buy out corporate-sponsored pension plans that are the livelihood of millions of retired Americans. We cannot help but be suspicious that this is a profit-driven motive and is not in the best interest of retirees.
Just a little over a year ago, Congress passed the Pension Security Act of 2006 that provides stronger protections for pension plans and requires more disclosure on the financial status of pension trust funds. Given all of the effort that went into the Act by lawmakers, retiree groups and other interested parties, the NRLN’s some 2 million members expect their elected representatives to keep a watchful eye on the financial firms and the federal agencies that are reviewing the buyout proposals.
This issue is too important to be left up to Washington bureaucrats who are not accountable to voters, millions of whom are retirees who spent decades earning their pensions from their former corporate employers. Agencies such as the Internal Revenue Service and the Labor Department’s Employee Benefits Security Administration should not be allowed to tinker with the Congressional intent of ERISA.
The NRLN believes that the proposed buyouts of corporate pension plans
that have some $2.3 trillion in assets are a dangerous idea that would lead
to diminished pension benefits. Shareowners of financial companies would
expects executives to maximize profits and the firms would have no loyalty
to retirees and the employees who will be future retirees. It is unlikely
that any surplus in the pension plans would be applied to the benefit of the
plan participants. Cost-of-living increases to retirees would most likely
President, National Retiree Legislative Network