Sam Johnson

Contact: McCall Cameron (202)225-4201

Washington, Dec 15, 2005 - After more than two years of working to strengthen the employer-provided pension system, Congressman Sam Johnson (3rd Dist.-Texas) announced that the U.S. House of Representatives passed his bill to revamp the pension system to protect employees and taxpayers.  The House passed the Pension Protection Act 294 – 132.

“This is a good and tough bill that makes companies put their money behind their promises and gives employees good information on the health of their pension plan,” said Johnson.  Johnson chairs the Subcommittee that oversees pension law, the Subcommittee on Employer-Employee Relations and serves on the other committee with authority over this issue, the Ways and Means Committee.

The measure balances reforms to ensure employers more accurately measure and fund their short-term and long-term pension promises, creates tough new funding requirements to ensure plans are adequately and consistently funded, and establishes meaningful disclosure provisions about the financial status of pension benefits.

“It’s a shame that our pension laws have allowed those most affected – workers and retirees – to be left in the dark and that there may be little money behind the pension promises of a secure retirement fund.  The proposed change couldn’t come at a better time as it comes on the heels of the United Airlines Pilots’ pension plan collapse which was only 30% funded.  Those pilots and their families didn’t know how bad off the situation was and they are the ones trying to figure out how to live on one-third of that they planned to receive,” said Johnson.

The bill also creates “phased retirement,” a much-need reform given the pending retirement of the Baby Boomer generation.   This provision would allow people to continue working but also collect their employer-based pension after the age of 62.  Current rules prohibit working for the same employer while also collecting a pension.  This prohibition simply forces many people to change jobs and work for a competitor or stop working all together.  “My constituents believe that this is a better way to step into retirement,” continued Johnson.

The bill also tightens funding rules so that under-funded plans are not dumped on the government – The Pension Benefit Guaranty Corporation (PBGC).  The PBGC estimates to be $28 billion in the red.  Companies need to fund their promises, not rely on the government to do it.  We can not leave the taxpayers holding the bag,” concluded Johnson.

The measure will now go to Conference with the Senate.  

Johnson represents the Third Congressional District which includes portions of Dallas and Collin Counties