Monday, July 2, 2007
Working To Ensure Retirement Security For American Workers
Recently, I introduced legislation to address one of the most important issues facing American workers today: the rapid erosion of the traditional pension plan.
Last year, Congress passed a law requiring companies to do a better job of funding their existing pension plans. But that's only part of the problem. We also need to stop employers from freezing their existing plans or denying participation to new employees. And, in the case of companies that don't have pension plans, we need to encourage employers to adopt one. These are key goals of my new bill, the Restoring Pension Promises to All Workers Act of 2007.
Bear in mind that 50 percent of the private workforce does not have a pension or savings plan — and more workers are losing their benefits every day. This trend is being accelerated by loopholes in the law that permit employers to break promises to employees, and to offer gold-plated benefits to top executives while denying even a basic pension to rank-and-file employees.
Right now, the law says that if a company provides a pension plan to executives, then it must also provide a pension to at least 70 percent of other employees. But many companies are getting around this requirement by setting up so-called non-qualified deferred-compensation plans — some of them extremely lavish -- for executives. Of course, these deferred-compensation plans are really just pensions by another name, but this loophole allows employers to skirt the law and deny pension benefits to rank-and-file workers.
My bill would put an end to this abuse. It says that if a company is profitable enough to afford these generous deferred-compensation plans for executives, then it can afford to provide at least a basic, guaranteed pension to everyone else.
My bill includes several other important provisions:
- It creates an Office of Pension Participant Advocacy in the Department of Labor. This office would serve as a resource for people negatively impacted by federal private pension laws. The Advocate would report to Congress on participant complaints, and would recommend legislative remedies.
- In addition, the bill would prevent employees and retirees from losing accrued benefits if their company changes owners through a merger or acquisition. Recently, for example, a subsidiary of Halliburton was sold to another company. In the transition, many workers who continued in the same jobs under the new owner lost as much as half of the value of their promised pensions. My bill would put a stop to this.
As corporate profits have soared in recent years, executives have been lavished with generous — and often excessive — benefits. Meanwhile, rank-and-file workers are having their pensions reduced or eliminated altogether. This is wrong. It is fueling a dramatic rise in inequality. And it is leaving tens of millions of Americans without any pension at all.
We need to do a better job of protecting existing pensions. And we need to encourage more employers to offer at least minimal pension plans to their workers. In both respects, my bill would be a giant step forward.
