More than 100 companies and associations team up to prevent future increases
For Immediate Release
Washington, DC – The Pension Coalition –comprised of 67 associations and individual companies across all major sectors of industry– has teamed up with other companies to combat additional increases in Pension Benefit Guaranty Corporation (PBGC) premiums.
Today a letter with signatures from more than 100 companies, including members of the Pension Coalition, was sent to Congress, expressing outrage and concern over recent increases to PBGC premiums. The letter urges lawmakers to protect job-creators, workers, retirees, and their retirement security by opposing any further increases in premiums paid to the PBGC by sponsors of single-employer defined benefit plans.
The recent premium increases come on top of nearly $17 billion in premium increases already imposed over the last three years. In that same time, Congress has almost doubled the flat rate premium from $35 per participant to $64 per participant. The variable rate premium has also tripled from $9 per $1,000 of underfunding to $30 per $1,000 of underfunding.
“Large employers work very hard to create benefits plans that offer their employees the best options for their future, but increasing premiums only serves to hurt those employees and employers participating in defined benefits plans,” said Annette Guarisco Fildes, president and CEO, The ERISA Industry Committee, a founding member of the Pension Coalition. “The most frustrating thing about this latest hike is that the PBGC’s own analysis does not call for an increase in premiums on single-employer defined benefit plans.”
“Businesses are already struggling with the $17 billion in PBGC premium increases enacted over the past few years, with nearly half of that amount being paid by manufacturers” said National Association of Manufacturers Director of Tax Policy Christina Crooks. “The additional premium hikes in the budget deal equate to a tax on employers, diverting dollars away from funding participant benefits, creating jobs and growing the economy.”
The letter also argues that counting increased PBGC premiums as general revenue for purposes of budgetary scorekeeping is inconsistent with good governance and does not strengthen the nation’s retirement system. By law, PBGC premiums go directly to the PBGC, not to the Treasury and can only be used to pay benefits to plan participants and beneficiaries.
“The trend over the past few years to increase PBGC premiums to offset deficit spending elsewhere in the federal budget, without regard to the impact on the pension plan system and the PBGC itself, reflects poorly on the legislative process and threatens Americans’ retirement income security,” said James Klein, president, American Benefits Council.
“The Chamber continues to oppose increases in PBGC premiums that are done outside of the context of comprehensive retirement reform,’ said Randy Johnson, senior vice president for Labor, Immigration and Employee Benefits at the U.S. Chamber. ’Increasing PBGC premiums in any other manner amounts to nothing more than a tax on employers who want to provide retirement security for their workers.”
You can read the Pension Coalition’s letter here.