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NEWS RELEASE
March 9, 2010
Senate pension funding relief measure saves jobs, but more work remainsWASHINGTON, DC — “Today, the Senate adopted a funding relief amendment, which, along with the underlying funding provisions included in jobs legislation, would save jobs across the country by allowing companies more time to repay the huge losses incurred by pension plans in 2008,” said American Benefits Council President James A. Klein. “This legislation, as amended, would enable companies to invest in business recovery and job retention instead of contributing enormous amounts on behalf of pension liabilities that will not come due for many years.” The American Benefits Council has long advocated for pension funding relief as a way to preserve jobs. In late 2009, the Council commissioned the report Jobs in Peril: Assessing the Impact of Increases in Defined Benefit Plan Funding Obligations on Employment During an Economic Recession, which clearly demonstrated an inverse relationship between pension funding obligations and revenue available for labor and capital expenditures. “The legislation provides relief at no taxpayer cost and does not change the underlying funding target for plan sponsors,” Klein said. “We commend the bipartisan nature of the funding bill. The amendment that made the funding relief work as intended was a bipartisan product offered under the leadership of Senators Johnny Isakson (R-GA) and Ben Cardin (D-MD). Senators Cardin and Isakson worked closely with Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Republican Member Charles Grassley (R-IA) and Senate Health, Education, Labor and Pensions Committee Chairman Tom Harkin (D-IA) and Ranking Republican Member Mike Enzi (R-WY).” As amended, the bill affords companies the tools necessary to manage the impact of the precipitous market declines in 2008, compounded by the continuing low interest rates that artificially inflate pension obligations. There are, however, critical steps ahead in order to avoid further layoffs that could be caused by the pension funding crisis. “First, it is essential that funding relief be enacted into law as soon as possible. The longer we wait, the more jobs will be lost,” Klein said. “Moreover, the Council remains concerned about the conditions that the Senate bill attaches to single employer funding relief. These conditions have the effect of either placing constraints on fundamental corporate transactions or reducing the value of relief. Some companies will not be able to comply with these limitations and still compete in the global economy. These employers will have to refrain from using the relief legislation and will be compelled to continue layoffs. In addition, the Council strongly believes more needs to be done to address unpredictability in the funding rules. The Council looks forward to working with Congress to address pension funding to further help preserve and create jobs.”
A Council summary of the amendment is available on the Council Web site: 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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