The Pension Rights Center wants Congress to change federal pension laws to protect participants in single-employer defined-benefit plans in response to asset declines caused by the financial crisis.
“As Congress considers new actions to address the economic crisis—by rescuing financial institutions, bailing out the auto industry, and aiding homeowners who face foreclosure—we urge you to also address the equally important issue of erosion in retirement financial security,” said a letter sent to congressional leaders.
The organization urged Congress to block funding relief to plans that have frozen benefits and to make relief contingent on an employer’s promise to not freeze plans for five years after the period of funding relief.
The letter also called for extending the amortization period for funding unfunded liabilities to 10 years from seven and reinstating a pre-Pension Protection Act rule for companies facing bankruptcy to make the effective date the day the company terminates the plan, not the date the employer files for bankruptcy protection. The current system allows bankrupt plan providers to “retroactively strip employees of benefits” when the bankruptcy filing date precedes the termination of the plan by several years.
The center also wants to ensure that deferred compensation for management and high-paid employees be frozen along with any DB plan freezes.
Filed by Timothy Inklebarger of Pensions & Investments, a sister publication of Workforce Management. To comment, e-mail editors@workforce com.
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