ERIC News Release
For Immediate Release: June 27, 2012
Washington, D.C. -- Statement by ERIC President and CEO Scott Macey on Including Pension Stabilization and PBGC Premium Increase in Student Loan and Highway Reauthorization Bill:
“ERIC applauds Congress for including pension stabilization provisions with legislation that prevents a student loan interest rate hike and extends transportation funding. ERIC remains adamantly opposed, however, to Congress including an increase in PBGC [Pension Benefit Guaranty Corporation] premiums.
“If anything, increasing premiums is just an incentive to push more plan sponsors to abandon their pension plans. Moreover, the PBGC’s deficit is artificially high due to the low interest rates used to calculate the agency’s deficit because of the Federal Reserve’s current monetary policy to keep rates low. We encourage Congress to carefully analyze the reasons behind the PBGC’s purported deficit before proceeding with raising premiums.
“As we have said many times, plan sponsors are not looking for a bailout, but rather pension funding rules that recognize market conditions, and sound and realistic assumptions. They simply want more realistic interest rates to calculate their pension liabilities, as opposed to the artificially low rates under the Federal Reserve’s current policy. While we strongly support pension stabilization, we do not believe that Congress should be including an increase in PBGC premiums as a tradeoff for enacting pension stabilization.”
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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.