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Retirees Network Calls Section 420 Amendment
A ‘Slap in the Face’ to Pension Reform
NRLN Campaign Targets Sen. Frank Lautenberg
(WASHINGTON, March 24, 2006) – A national retiree organization is calling on the U.S. Senate and House conference committee on pension reform to reject a provision to modify Section 420 of the Internal Revenue Code related to surplus pension assets.
“This provision, which lowers the threshold level for companies to transfer dollars out of their pension plans from 125 percent to 115 percent, places corporate interests ahead of pension security for millions of retirees” announced A. J. “Jim” Norby, president of the National Retiree Legislative Network (NRLN).
Citing an article in the New York Times, Norby reported how a lobbyist for Prudential was able to persuade several U.S. senators to support the measure which makes it easier for corporations to take money out of their pension plans. Among the amendment’s key proponents was Sen. Frank Lautenberg, a Democrat from New Jersey where Prudential has its headquarters.
“Inclusion of this provision is a slap in the face to the whole concept of pension reform,” Norby said. “It’s disturbing to think that a Washington insider now working as a corporate lobbyist could persuade Sen. Lautenberg and other members of Congress to support legislation that would allow companies to use retiree pension assets to pay the bill for health care. When Prudential says they will use surplus pension assets to buy health insurance for its retirees, what they really mean is they don’t want to pay for health insurance any more.”
The NRLN has initiated a grass roots campaign urging Sen. Lautenberg to drop the Section 420 amendment. “Our members in New Jersey are contacting Sen. Lautenberg to express their concerns over his decision to support special corporate interests over the best interests of workers and retirees,” Norby added. “The Section 420 amendment is just flat wrong and our congressional representatives must be held accountable for going along with Prudential’s smoke screen to lower the pension surplus limit to 115 percent.”
Based in Washington, D.C., NRLN is dedicated to securing federal legislation that will guarantee the fair and equitable treatment of retirees in private and public sector health and pension programs. NRLN represents a non-partisan, grass roots coalition of retiree associations with a combined membership of more than 2 million men and women who are seeking to protect their pension and health care benefits. For more information, visit the NRLN Web site at www.nrln.org.