Retiree Organization Opposes Financial Firms’
Proposals To Buy Out Corporate Pension Plans
Retiree Leader Tells Heads of Congressional Committees
Buyout Proposals Are Profit Driven And Not In Interest of Retirees
WASHINGTON (October 19, 2007) – The leader of the National Retiree Legislative Network (NRLN) today voiced opposition to efforts by financial firms to clear a regulatory path that would allow them to buy out corporate-sponsored pension plans.
“The livelihoods of millions of retired Americans depend on the pensions from their former employers,” said A. J. (Jim) Norby, NRLN President. “It is not in the interest of retirees to have their pension trust funds taken over by financial companies whose main motivation would be corporate profits and not the welfare of retirees.”
The buyout proposals by a number of major banks and investment firms vary, but generally seek to take over pension plans that have been frozen by their corporate sponsors. The Wall Street companies propose to accomplish this either directly or by setting up investment management companies.
Norby said he has sent letters to leaders of two Congressional committees contending that the pension buyout 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. The NRLN letters were sent to the leaders of the Senate Committee on Health, Education, Labor and Pensions, plus the House Committee on Education and Labor.
“I’ve pointed out to the Senators and Representatives that 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,” Norby said. “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.”
Norby said 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 expect executives to maximize profits and the firms would have no loyalty to retirees and the employees who will be future retirees,” Norby said. “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 totally disappear.”
Based in Washington, D.C., the NRLN is dedicated to securing federal legislation that will guarantee the fair and equitable treatment of retirees in the private and public sector. The NRLN represents a non-partisan, grass roots coalition of retiree associations with a combined membership of some two million men and women who are seeking to protect their pension and healthcare benefits. For more information, visit the NRLN Web site at http://www.nrln.org.