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<nobr>Jan 28, 2004</nobr>
ERIC Praises Senate Passage of Pension Funding Bill
Urges Agreement with House
For Immediate Release:
Washington, DC – The ERISA Industry Committee (ERIC) today commended the Senate for passing pension funding legislation (H.R.3108) that would replace the defunct 30-year Treasury bond interest rate used for pension calculations with a long-term, high quality corporate bond rate. The bill was approved with bipartisan support by a vote of 86-9.
“The passage of this pension funding legislation is a major step forward and a tribute to the Senate’s willingness to come together on a bipartisan basis and pass free-standing pension legislation at a critical time,” said Mark Ugoretz, president of The ERISA Industry Committee. “The Senate kept their word in making replacement of the defunct 30-year bond a major priority of this legislative session and for that, we commend them and urge them to meet with House leaders to resolve the differences in the two versions of the bill.”
ERIC warned that additional action is required before this much-needed pension funding legislation becomes law. Specifically, either the House must approve the Senate bill or both bodies must enter into a conference agreement.
“We strongly urge the leadership to move very quickly to take final action,” Ugoretz said. “With the temporary interest rate used to calculate pension liabilities in 2002 and 2003 already expired, the level of uncertainty surrounding employer pension plans is at an all-time high. Legislation must be enacted now in order to prevent plan freezes and protect workers who participate in pension plans, and to ensure the ability of employers to maintain those plans.”
The bill has been a major ERIC initiative since virtually all of the Association’s members sponsor defined benefit plans. The business community has argued that if the defunct rate is not replaced now, companies will be forced to use an interest rate to calculate their liabilities that will require them to put as much as hundreds of millions of dollars more into their plans than is reasonably necessary. That money would otherwise be used to increase spending on employment and on plant and equipment that would further fuel and support economic recovery in 2004.
To arrange an interview with Mark Ugoretz or Janice Gregory, Senior Vice President, Retirement Security, please contact Doug Baj at (202) 789-1400 or dbaj@eric.org.
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The ERISA Industry Committee (ERIC) is a non-profit association committed to the advancement of employee retirement, health, and welfare benefit plans of America's largest employers and represents exclusively the employee benefits interests of major employers. ERIC's members provide comprehensive retirement, health care coverage and other economic security benefits directly to some 25 million 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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