<nobr>Apr 8, 2004</nobr>

ERIC Commends Congress for Passing Pension Funding Bill

Washington, DC -- The ERISA Industry Committee (ERIC) today praised Congress for approving and sending to the President a pension bill (H.R.3108) that allows companies to avoid making unnecessary mandated contributions to their pension plans. The bill also frees up an estimated $80 billion that will be used to bolster the economy by way of jobs and investment.

“Congress has taken an enormous step in saving the U. S. private pension system,” said Mark Ugoretz, president of ERIC. “We are grateful to Members of Congress on both sides of the aisle who worked tirelessly over the past 2-1/2 years to enact a rational benchmark for pension funding after the Treasury stopped issuing its 30 year bond that had been the benchmark for pension funding."

He pointed out that the series of bipartisan votes on the bill stood out in an atmosphere that many believed has polarized Congress. "With the baby boomers reaching retirement age and Social Security and Medicare facing trouble, it is clear that both sides of the aisle are realizing the critical issues we face in maintaining a secure and sound private pension system in which employers are encouraged to participate," said Ugoretz.

"This legislation immediately helps American workers by alleviating the uncertainty their employers have experienced over the past three years in trying to fund their pension plans based on a benchmark that doesn't exist. Had the bill not passed, many companies would have been forced to freeze their plans. Moreover, the bill ensures that companies won't have to choose between the pension plan and investing in jobs, plants, and equipment that will provide a major boost to the economy," he said.

The bill allows employers to use a blend of long-term corporate bonds as a benchmark in calculating their pension liabilities in 2004 and 2005, instead of continuing to require them to use the defunct 30-year Treasury bond rate, which the government stopped issuing in 2001. ERIC originally proposed the corporate bond rate in 2002 and has worked to secure its enactment for the past 2-1/2 years.

Noting the series of strong bipartisan votes on the measure, ERIC called on the President to quickly approve the legislation so Treasury can publish a new corporate bond rate in time for companies to make their 2004 first quarter pension contribution on April 15.

To arrange an interview with Mark Ugoretz, please contact Doug Baj at (202) 789-1400 or dbaj@eric.org.

###

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.

Back to Previous Page