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NEWS RELEASE
February 12, 2010
Dropping pension funding relief provisions from jobs bill a serious mistake, will cost jobs and slow economic recoveryWASHINGTON, DC — "By eliminating defined benefit pension funding relief from jobs legislation, Congressional leadership is wasting a golden opportunity to save jobs and promote economic recovery at no cost to the federal government," American Benefits Council President James A. Klein said today."Immediate relief is essential to the preservation of thousands of American jobs. Every day that goes by without a solution means more facilities will close, more layoffs will be planned and economic growth slips farther away. One recent survey found that cash contributions to pension plans will be 400 percent higher in 2010 than in 2009 and another survey found that fully 68 percent of employers reported that unexpected cash outlays for pension plans would cause cuts outside the plan including hiring and workforce training. Do we really need any further evidence that pension funding is a jobs issue?" Klein said. As the Council has consistently argued, an unprecedented "perfect storm" of depressed financial markets, low interest rates and new pension funding rules has artificially inflated companies' defined benefit pension obligations. Millions of dollars that would normally go toward job creation and capital investment are being diverted into already healthy pension funds. "To help save jobs in this country, we need to assist companies in managing these paper losses without imposing excessive conditions or requirements on the relief. This would allow companies the time and capital they need to invest in their workforce. Economic analysis shows that for every dollar of mandatory pension funding there is 60 to 70 cents of lost capital expenditures. Pension funding relief stimulates the economy, saves jobs, and does not cost taxpayers anything; in fact, relief raises money. Relief without onerous conditions should be enacted as soon as possible," Klein said. "After the encouraging news that pension funding relief had been included in the bipartisan jobs bill drafted by Senators Max Baucus and Charles Grassley, the elimination of this relief by Majority Leader Harry Reid from the latest version of jobs legislation is particularly troubling. We urge lawmakers to include pension funding relief as part of jobs legislation as soon as possible. To ensure long-term retirement security, we must create long-term job security," Klein said. For more information, or to arrange an interview with Council staff, please contact Jason Hammersla, Council director of communications, at 202-289-6700 (office) or (202) 253-5458 (cell).
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 Council's members 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.
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