WASHINGTON, D.C. - House Republicans today formally introduced comprehensive pension reform legislation - the Pension Protection Act (H.R. 2830) - intended to fix outdated worker pension laws and protect the interests of workers, retirees, and taxpayers.
Education the Workforce Committee Chairman John Boehner (R-OH), Ways Means Committee Chairman Bill Thomas (R-CA), Employer-Employee Relations Subcommittee Chairman Sam Johnson (R-TX), and Employer-Employee Relations Subcommittee Vice Chair John Kline (R-MN) introduced the bill at a press conference this morning.
The workers at United Airlines who've lost significant pension benefits serve as a reminder that protecting workers and taxpayers through fundamental pension reform is needed now, said Boehner. This bill strikes the right balance of establishing tougher funding requirements for employers, enhancing disclosure on behalf of workers, and protecting taxpayers from a possible multi-billion dollar bailout.
Our proposal is consistent with President Bush's proposal for reform, and I look forward to working with both the Administration as well as our colleagues in the Senate to move this process forward, added Boehner.
We are setting realistic new standards for pension funding that are clear and will result in real consequences if pension plans are underfunded, said Johnson. Underfunded plans are bad for workers, employers and the American taxpayer.
One of the most important parts of this bill is that the people most affected by pension plans - the workers who expect to receive that money when they retire - are going to get real-time information about the health of their pensions. This will prevent any unpleasant surprises for workers, added Johnson. I am glad to work with Chairman Boehner and Chairman Thomas on reforms to the traditional pension system which is long overdue for an overhaul.
The Pension Protection Act also establishes a structure for identifying troubled multiemployer pension plans, which are defined benefit plans maintained by two or more employers in a particular trade or industry that are governed by a collective bargaining agreement.
Multiemployer pension plans were designed for a 1940s workforce that assumed the multiemployer labor base would continue to grow, said Kline. In recent years it has become glaringly apparent that this outdated system creates obstacles for employers, thus threatening the retirement security of American workers and putting American taxpayers at risk of being forced to fund a multi-billion dollar bail out.
I am pleased with the legislation we are introducing today and look forward to continuing to work with my colleagues to strengthen retirement security, help employers meet their obligations, and protect American taxpayers, Kline added.
The bill also includes a comprehensive investment advice proposal that has passed the House three times with significant Democrat support, twice in the 107th Congress and once in the 108th Congress. Specifically, the bill allows employers to provide rank-and-file workers with access to a high-quality investment advice as an employee benefit.
Expanding worker access to quality investment advice is one of the most important pension protections we can provide, said Boehner. This is a common sense way to encourage employers to provide their workers with access to quality investment advisers while including tough fiduciary and disclosure protections to ensure that workers receive advice solely in their best interests.
The Pension Protection Act as introduced does not include finalized cash balance provisions. Boehner today also introduced a stand-alone bill - the Pension Preservation Portability Act - as a starting point for discussion on efforts to resolve the legal uncertainty surrounding cash balance plans. Staff is working to resolve details on this issue and expects to finalize it before subcommittee markup.
The measure, passed the same day the federal Pension Benefit Guaranty Corp. assumed liability for United Airlines' pension plans, aims to reduce similar pension defaults in the future.
The 279-131 vote came only hours before the House was expected to begin a five-week summer break.
The legislation gives special repayment breaks to the airline industry.
New rules governing defined-benefit pension plans offered by private employers may join changes to the government Social Security program in a retirement security package now being cobbled together in...