<nobr>Feb 10, 2009</nobr>

Lack of Pension Funding Relief in Stimulus Bill Will Harm Recovery and Jobs

Washington, D.C. -- Following Senate passage today of The American Recovery and Reinvestment Act of 2009, Mark Ugoretz, President of The ERISA Industry Committee (ERIC), a Washington, D.C.-based trade association representing America's major employers, issued the following statement over the lack of pension funding relief in the economic stimulus legislation:

"The severe market downturn, coupled with the volatility of 2006 changes in pension funding rules, has had a devastating effect on the funding status of defined benefit pension plans across the country and the failure of the House and Senate to recognize this urgency is extremely disappointing.

"Real relief for America's pension plans is an absolute necessity to protect jobs and other retirement savings plans, and we strongly encourage the House and Senate conferees to include meaningful relief in the final package. Failure to do so will slow economic recovery, increase unemployment, and put retirement security at risk.

"Because of speed with which companies must fund their long-term pension obligations under changes to pension funding law enacted in 2006, many sponsors of traditional defined benefit pension plans, strapped for cash, are having to choose between funding their plans, cutting back on jobs and cutting back on 401(k) contributions.

"Congress cannot turn a deaf ear to providing more time for employers to meet some $65 billion in unexpected additional pension contributions in 2009 that could go towards stimulating the economy -- at no cost to taxpayers. While the recently enacted Worker, Retiree, and Employer Relief Act of 2008 was a good first step, the legislation ultimately did not provide the substantive relief that plan sponsors need. Employers are not asking for a bailout or to be relieved of their pension obligations -- rather they are merely asking for more time to meet those obligations.

"Without such relief, employers are left with unfortunate choices between freezing their plans, laying off workers, delaying capital investments, and pouring cash into their pension plans. Congress should provide meaningful relief to plan sponsors as part of the stimulus bill -- to do otherwise is to recklessly risk the retirement benefits of those fortunate enough to still have a traditional pension."

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For more information:
Ted Godbout
Manager, Communications
The ERISA Industry Committee
1400 L Street, NW, Suite 350
Washington, DC 20005
Phone: (202) 789-1400
Fax: (202) 789-1120
tgodbout@eric.org
www.eric.org

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The ERISA Industry Committee (ERIC) is a non-profit association committed to representing the advancement of the employee retirement, health, and compensation plans of America's largest employers. ERIC's members provide benchmark retirement, health care coverage, compensation, and other economic security benefits directly to tens of millions of active and retired workers and their families. ERIC has a strong interest in proposals affecting its members' ability to deliver those benefits, their cost and their effectiveness, as well as the role of those benefits in the American economy.

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