The Democratic Senate proposal would boost the pension
maximums by about 13% for manufacturing employees under a
bill (S. 2875) introduced by Senators Paul Wellstone
(D-Minnesota), Barbara Mikulski (D-Maryland.), and Mark
The maximum guaranteed pension for workers in plans that terminate in 2002 is $3,579 per month or $42,954 per year.
Wellstone said in Senate floor statement that the
percentage increase would translate into approximately $150
to $200 more per month for retirees over the age of 50.
Wellstone said employees that retire at age 65 generally are able to collect their full pension regardless of whether their employer is still in business, which discriminates against those in the manufacturing sector that normally retire prior to age 65.
The bill also would direct the PBGC to cover supplemental benefits such as Social Security “bridge” payments as basic pension benefits. The bill also calls for indexing the $20 per year option on the five-year phase-in rule for recent benefit increases, intended in ERISA to represent normal benefit increases.
The Congressional Budget Office has issued a preliminary evaluation of proposal that puts its cost at $110 million over the next 10 years, Wellstone said.
Legally mandated pension limits as paid by the PBGC have been an issue for a growing number of plans – steelmaker RTI, for one.