FOR IMMEDIATE RELEASE
For Information Contact:
A.J. (Jim) Norby
National Retiree Group Cites Legislative Priorities
For Addressing America’s Pension Crisis
NRLN Makes Its Case for ‘Meaningful Pension Reform’
(WASHINGTON, Aug. 22, 2005) – The National Retiree Legislative Network (NRLN) is encouraging meaningful pension reform legislation proposed in the U.S. Senate, while opposing provisions contained in a pair of bills under review by separate committees in the U.S. House of Representatives.
“Workers and retirees have planned for retirement based on the expectation that the pension and other benefits they have earned through decades of their labor will be there for them. There must be safeguards in pension reform legislation that will prevent employers from breaking promises to workers and retirees,” announced NRLN President Jim Norby.
Norby cited the current effort by corporate lobbyists on behalf of legislation to legalize cash-balance plans retroactively, which is vigorously opposed by the NRLN and its member organizations. “Making cash-balance legislation retroactive would endanger pending lawsuits for hundreds of thousands of employees and retirees,” Norby said.
“At this time, we support the National Employee Savings and Trust Equity Guarantee Act (S. 219) that has been created in the Senate Finance Committee and we recommend certain provisions of the Pension Benefit Protection Act of 2005 (S. 1304),” Norby said.
Key features of Senate bill S. 219 that are supported by NRLN include:
· The requirement that under funded pension plans must reach 100 percent funding within seven years.
· Stricter pension funding requirements for companies with poor credit ratings.
· Protection of older employees when there is a conversion to cash-balance or hybrid pension plans.
· Preventing the abusive practice known as “wear-away” in cash-balance conversions. Wear-away occurs when companies open cash-balance accounts that are worth less than the benefits older workers accrue under defined pension plans. Under this practice, companies can freeze or reduce the benefit accruals for older workers for a period of time, while younger workers continue to earn benefits.
· The requirement making cash-balance plans prospective – not retroactive.
The Pension Benefit Protection Act of 2005 (S. 1304) also prohibits wear-away in cash-balance plan conversions. It would also equalize benefits for older employees when traditional benefit plans are converted to cash-balance or hybrid plans, and offer them a choice at retirement between the old and new plans, Norby noted.
NRLN opposes a pair of bills – the Pension Preservation Act of 2005 (H.R. 2830) and the Pension Preservation and Portability Act of 2005 (H.R. 2831) – which are currently assigned to the House of Representative Education and Welfare Committee and the Ways and Means Committee.
“As currently written, these bills would legalize age differentials of accrued benefits when defined benefit plans are converted to cash-balance plans and wear-away,” Norby said.
“Each week we read news reports of under funded retirement plans from troubled companies and the threat they pose to the federal Pension Benefit Guaranty Corp. (PBGC). That agency reports that single-employer plans have liabilities that exceed assets by $450 billion,” Norby noted.
“What we’ve ended up with is a system that’s broken and in need of a legislative fix that assures the integrity of the PBGC and protects retirees from losing the pensions they deserve after loyal years of service to their employers,” Norby said.
“If our corporate leaders will not live up to their commitments for deferred compensation, then the federal government must take steps to protect the interests of retirees,” Norby said.
“It is time our congressional leaders and President Bush bring about meaningful pension reform that prevents age discrimination, ensures strong pension funding and disclosure requirements, and protects trust fund assets. In addition, legislation such as The Emergency Retiree Health Benefits Protection Act (H.R. 1322) is desperately needed to help retirees receive their promised health care benefits,” Norby added.
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, grassroots coalition of retiree associations with a combined membership of nearly 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.