White House unveils plan to shore up pension agency
Monday, January 10, 2005 6:33:17 PM
afxpress.com
WASHINGTON (AFX) - Secretary of Labor Elaine Chao announced Monday the administration's plans to shore up the federal agency responsible for backing private-sector pensions and make more secure the retirement funds of millions of U.S. workers and retirees
The administration's proposal calls for reform of funding rules for the Pension Benefit Guarantee Corporation, including a probable increase for employer premiums, more information made available on pension plans for workers, and new flexibility for employers to make contributions to pension plans
For companies with healthy pension plans, the administration would index the flat rate premium paid by companies to growth in workers' wages. Currently there is a flat rate premium for companies, which has not been increased since 1991
For companies with financial woes and underfunded pension plans, the proposal would increase the premiums as the company's financial risk increases
As of November, 2004, the PBGC recorded a record deficit of $23.3 billion for private single-employer pension plans. Chao said in prepared remarks that "the pension security of 34 million workers and retirees will be more at risk" if the agency is not reformed and funds for the agency were not increased
The administration's plan will require congressional approval, and Chao said the White House has received commitment from House and Senate leaders to take up pension reform legislation this year
In the House, Rep. John Boehner (R-Ohio) and Rep. Bill Thomas (R-Calif.), chairmen of the House Education and Ways and Means committees, respectively, have said their panels will consider the legislation. Senate Finance Committee Chairman Charles Grassley (R-Ia.), and Senate Health, Education, Labor and Pension Committee Chairman Mike Enzi (R-Wyo.) also said they will examine the issue. |
