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Pension Lobbying Group Warns Congress of Consequences

The ERISA Industry Committee wants lawmakers to approve legislation that would give the plans temporary relief from provisions in the Pension Protection Act of 2006, which will phase in full funding requirements during the next several years.

December 10, 2008
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Most employers will have to “sharply reduce their work forces, freeze plans, and curtail other benefits such as 401(k) contributions, as well as other business spending” if federal lawmakers fail to approve legislation to ease pension funding requirements this year, according to a letter sent Monday, December 8, by the ERISA Industry Committee to all members of Congress.

“Without immediate congressional action, prudent plan sponsors will have to assume that they will be making dramatically increased pension contributions next year and will retrench to pay for or offset those contributions accordingly,” said the letter, signed by ERISA Industry Committee president Mark Ugoretz.

The ERISA Industry Committee, which represents major employer and other pension industry lobbying groups, is concerned that the severe downturn in the economy this year has led to the underfunding of many pension plans. The group wants lawmakers to approve legislation that would give the plans temporary relief from provisions in the Pension Protection Act of 2006 that will phase in full funding requirements during the next several years.

Filed by Doug Halonen of Pensions & Investments, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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