Washington, Dec 15, 2005 -

Congressman Kucinich released the following statement following the passage of HR 2830, the Pension Protection Act of 2005:

"I’ve heard from many hundreds of workers about HR 2830. Over 400 UAW members called my office to express their strong opposition to HR 2830 as it had been reported out of committee. I was not alone in hearing from concerned workers; offices across the nation were filled with calls from union members.

"This groundswell of opposition from the very workers whose pensions this bill purports to protect effectively stopped the bill in its tracks. The Pension Protection Act was going nowhere. With the bill brought to a stand still, the majority was forced to negotiate. The result of that negotiation with the autoworkers is shutdown benefits again being allowed for plans at least 80% funded. This is a significant change that will help workers and I applaud its inclusion. A second negotiated change regarding credit balances will help protect workers from companies who would seek to play the system, and lower their funded status simply to freeze worker benefits. This improvement is a necessary change, one that will better protect workers.

"I voted yes to codify the improvements negotiated by the autoworkers and to enable the steelworkers a forum to press for further improvements in the conference committee. I have some hope that there is a process for making additional improvements. But my vote was conditioned on the expectation that the bill will be substantially improved in conference committee. I will need to see significant further improvements before voting yes again.

"Thanks to union members acting together, workers were able to bring important improvements to the bill. One of these changes is the restoration of shutdown benefits, which would have previously been prohibited under this bill. These benefits, critically important in many industries, including the steel and automotive industries, provide a necessary measure of security for workers when a plant closes. During the markup of HR 2830 in the Committee on Education and the Workforce, I offered an amendment to restore these benefits for workers. So, I was pleased to see that under the negotiated changes, some of these benefits have been restored.

"While I am pleased to see the changes unions were able to negotiate, there are still serious problems with HR 2830. And these problems must be addressed to ensure that all workers’ pensions are protected. One such problem, which I hope will be fixed in the conference committee, concerns the rules affecting plant shutdown benefits for companies with small numbers of facilities. The rules are biased against such companies, which will be faced with onerous funding requirements in the event of the shutdown of a facility. The workers, of course, would be the ultimate bearers of the burden, since older workers would lose the shutdown benefits that enable them to fully vest in the event of a plant shutdown. I support the efforts of the United Steelworkers of America to reform the bill and I will work with my colleagues to encourage the conferees to adopt further shutdown benefit reforms.

"The conferees must also address the issue of cash balance plans. This bill does a great disservice to older workers by denying the reality that conversions from traditional defined benefit plans to cash balance plans harm older workers. A report released in early November by the GAO found that a majority of older workers experience deep cuts in their pension when converted from a traditional plan to a cash balance plan without transition protections. Older workers may actually be forced to stop earning benefits all together as cash balance plans are applied retroactively. Employees must “wear away” the earnings in old plans before they begin to earn new benefits under the cash balance plans. This is not only unfair, it is wrong. Providing transition protections for older workers should not be a choice for employers but a requirement. Any change in plans must protect the accrued benefits of employees and the conference report should reflect that reality.

"Additionally, the conferees must find a solution to the pension crisis that actually protects taxpayers from the necessity of bailing out the PBGC, if companies are allowed to underfund their pensions, then dump those pensions on the PBGC. The PBGC is currently facing a $23 billion deficit, but rather than lessening that deficit, this bill will increase it. The Congressional Budget Office concluded that HR 2830 would increase the PBGC’s deficit by $9 billion over the next ten years. Even the PBGC’s own analysis of the bill concluded that HR 2830 would actually increase the agency deficit. This is unacceptable. We must work in conference to ensure that we are not contributing to the problem but solving it.

"I voted in favor of HR 2830 today, but my vote was not a signal of support for the entire bill. My vote was in support of the changes union members have brought about. My vote was in support of working in conference to address several other egregious problems with the bill. And my vote today was not indicative of what my vote on the conference report will be. There is much work to be done in conference to ensure that workers’ pensions are protected.

"The nation’s pension problem will not all be solved with this bill. But I will continue to work with my colleagues to improve this bill in conference and protect workers’ pensions. "