McKeon Hails Passage of

Sweeping Reforms to Worker Pension Laws

Bill Reflects Bipartisan House-Senate Conference Agreement on Pension Overhaul

WASHINGTON, D.C. – U.S. House Education & the Workforce Committee Chairman Howard P. “Buck” McKeon (R-CA) applauded overwhelming passage of H.R. 4, the Pension Protection Act, legislation that reflects the bipartisan agreement struck this week by House and Senate negotiators to reform outdated worker pension laws.  The House passed the measure by a vote of 279-131.

“The pension laws on the books today were written for a 1970s economy with a 1970s workforce,” said McKeon, who serves as Vice-Chairman of the House-Senate pension reform conference.  “Times have changed, but unfortunately, these laws have not.  The new realities of a 21st Century economy require a new approach to retirement security.  Tonight, we embraced that new approach, and this represents a major victory for American workers, retirees, and taxpayers.”

In addition to reflecting the bipartisan House-Senate pension conference agreement, the Pension Protection Act also enjoys strong support from a broad coalition of both labor and employer groups.  Among those supporting swift House approval of the bill were the United Auto Workers, the U.S. Chamber of Commerce, and the United Brotherhood of Carpenters & Joiners of America.

“The Pension Protection Act will reform broken pension rules that no longer serve the interests of workers who count on their retirement savings being there for them when they need it,” McKeon noted.  “It’s imperative that the Senate move quickly on this legislation next week so President Bush can sign it into law just as soon as possible.  These changes are long-overdue, and we simply cannot afford to wait much longer to enact these sweeping reforms.”

The Pension Protection Act includes tough new funding requirements to ensure employers adequately and consistently fund their pension plans, provide workers with meaningful disclosure about the financial status of their benefits, and protect taxpayers from a possible multi-billion dollar bailout of the federal Pension Benefit Guaranty Corporation (PBGC).  Specifically, H.R. 4:

• Tightens funding requirements so employers make more cash contributions to their worker pension funds;

• Closes loopholes that allow underfunded plans to skip pension payments;

• Prohibits employers and union leaders from digging a hole even deeper by promising extra benefits if their pension plan is significantly underfunded;

• Enhances disclosure to give workers and retirees more information about the status of their pension plans;

• Protects multiemployer pension plans for workers and their employers;

• Restricts “golden parachute” executive compensation arrangements in which executives of companies in financial difficulty often are given generous deferred compensation arrangements while the retirement security of rank-and-file workers remains at risk; and

• Gives workers new access to personally-tailored, face-to-face professional investment advice.

For a summary of H.R. 4, the Pension Protection Act, visit the Education & the Workforce Committee website at http://edworkforce.house.gov/issues/109th/workforce/pension/pensionbillsum72806.htm.

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