American Benefits Council: News Room

NEWS RELEASE

December 11, 2008
PR-08/28
For additional information:
Jason Hammersla
202-289-6700

Council applauds House passage of pension relief

Senate urged to act soon on measure to help mitigate effects of economic downturn

WASHINGTON, D.C. — "House passage of the The Worker, Retiree, and Employer Recovery Act (H.R. 7327) gives hope to employer pension plan sponsors fighting against the current economic downturn," American Benefits Council President James A. Klein today, after the U.S. House of Representatives approved the measure by unanimous consent. The measure also provides needed relief next year for retirees who have seen their retirement savings account balances decline over the past few months. "We strongly urge the Senate to follow suit — today if possible — and mitigate the effects of the financial crisis on jobs, economic recovery and retirement security."

The Council has long supported needed corrections and improvements to the Pension Protection Act — measures that have been made more crucial in light of the recent economic turmoil. "Unprecedented market volatility has created sudden and dramatically greater pension funding obligations at the worst possible time. Money that is needed to save jobs and for capital investment, would instead be directed to pension plans as a result of sudden, unprecedented market conditions," Klein said.

H.R. 7327 includes:

minimum required distribution relief, temporarily waiving the rules forcing participants to take distributions from their qualified plans or IRAs;
clarification of pension plan "smoothing," allowing plans to recognize unexpected asset gains and losses over 24 months;
improved transition to the new funding rules, in which the phased-in funding threshold would hold at 92 percent for another year;
multiemployer plan relief, permitting plan sponsors to elect to temporarily freeze the status of certain multiemployer plans at the same funding status held in the previous plan year; and
a rule easing the requirement that would otherwise compel employers to restrict the accrual of pension benefits.

"Time is of the essence for Senate action. Many companies are already making tough budget decisions for next year. Swift action will help to stem the tide of layoffs, cutbacks and pension freezes," Klein said.

"As the global economy slowly recovers, additional relief will likely still be needed to limit the effect of market turmoil on American companies," Klein said. "Final passage of H.R. 7327 would represent an important first step in shoring up our retirement plans, and would signal that lawmakers recognize the critical importance of protecting employer-sponsored pensions."

Council letters to Congress and other resources are available on the Council's Pension Reform Web page. To arrange an interview with a member of the Council staff, please contact Jason Hammersla, Council director, communications, at jhammersla@abcstaff.org or by phone at (202) 289-6700.

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The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Councils member's represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.

http://www.americanbenefitscouncil.org/issues/retirement/pension.cfm