Washington, Apr 11, 2002 - Congressman Dennis Kucinich (D-OH), a member of the House Education and Workforce Subcommittee on Workforce Protections spoke on the House floor this afternoon against the Pension Security Act because he says it does not protect employee pensions when a company files for bankruptcy. Following is a statement he delivered on the floor of the U.S. House of Representatives.

What’s at stake here today is the faith of the America people in their economic system and in this Congress. The American dream is to work hard, get ahead, give your life to a company, save with a secure, decent retirement pension. That dream is being destroyed by corporate executives who are cheating people out of their hard-earned retirement benefits.

As the nation watched enormous corporate bankruptcies unfold at Enron and Global Crossing, and the people of my district watched chapter 11 proceedings at LTV Steel, we saw the plot thicken around one major theme - there are two sets of rules; executives get one set of rules and their employees have to play under a different set of rules.

Corporate executives get special treatment including more investment choices, no lock down restrictions, generous deferred compensation plans that aren’t required to be disclosed, guaranteed rates of return on pension investments and a golden parachute of retention bonuses and other benefits when a company goes under.

Employees on the other hand have barriers to information, fewer options, and more restrictions on investment and no guaranteed returns. The most egregious disparity is that during a bankruptcy, executive pension plans are totally protected from creditors. Executives can count on cashing in their entire package. On the other hand, employee protections are not protected from creditors. Employees stand at the end of the line and must wait behind other creditors to claim what rightfully belongs to them for compensation that is already earned.

Finally, if employees do get to make a claim that claim is capped at a mere $4650. At the end of the Enron debacle, Ken Lay still receives $475,000 each year for the rest of his life and a prepaid $12 million insurance policy while the employees 401Ks are drained and they’ll be lucky if the get the $4650 maximum severance pay.

This bill does nothing to protect employee pensions in a bankruptcy. It fails to give equal protection to employees’ pensions as the law currently provides to executive pensions. I urge a “no” vote on the bill.