Companies that provide "lavish" executive benefits would also have to provide defined-benefit pensions for all employees under a bill introduced Thursday, June 29.
"At a time when employees’ retirement security is anything but secure, things are looking rosy in the corporate board room, where our nation’s corporate elite make sure that they have pensions, higher incomes and other benefits so generous that Midas would have been embarrassed," said Sen. Tom Harkin, D-Iowa, who proposed the bill, in a statement.
Despite rising corporate profits in recent years, many workers have had their pensions frozen, the statement said.
Many companies have said they cannot afford pensions while at the same time awarding top executives lucrative non-pension benefits that function much like pensions, the statement continued.
The legislation would also create an Office of Pension Participant Advocacy in the Department of Labor that would develop recommendations to improve pension policies and give technical assistance to plan sponsors about their obligations to pension plan participants.
People who retired before companies cut back on pension benefits would be shielded from cuts under the bill.
Companies that change ownership would not be able to revoke employees’ pension benefits, as is currently the case, under another provision of the bill.
Pension beneficiaries who received overpayments by mistake would be allowed to keep them if it would be a hardship for them to repay them under the legislation as well.
Filed by Sara Hansard of Investment News, a sister publication of Workforce Management. To comment, e-mail firstname.lastname@example.org.