Harkin Proposes DB Mandate for Employers with Deferred Comp Programs

June 29, 2007 (PLANSPONSOR.COM) - An Iowa Democrat has proposed U.S. companies with deferred compensation programs be forced to also provide other workers with a defined benefit plan.

The   Restoring Pension Promises to Workers Act of 2007, introduced in the U.S. Senate by Senator Tom Harkin (D-Iowa), also features a number of other mandates including protection for employee benefits when a company is involved in a merger or changes ownership, according to a Harkin news release.

“More and more companies, even those with a healthy bottom line, are telling workers they can no longer afford to provide them with the benefits they had been promised,” said Harkin, in his announcement, referring to the trend of freezing DB plans. “But at a time when employees’ retirement security is anything but secure, things are looking rosy in the corporate board room, where our nation’s corporate elite make sure that they have pensions, higher incomes and other benefits so generous that Midas would have been embarrassed. This is just plain wrong.”  

According to the Harkin announcement, the legislation also would:

  • allow workers to keep pension overpayments “ if it would cause a significant hardship to the individual” to return them, and institute a three-year statute of limitations for employer suits to recover such overpayments,
  • protect retired workers from cuts to their pension benefits,
  • create an Office of Pension Participant Advocacy   within the Department of Labor (DoL) as a resource for people who are affected by pension cutbacks and to also consult with participant advocate groups, companies, and federal groups that work with pensions to develop policy recommendations to share with the DoL secretary and Congress, and 
  • protect pensions for surviving spouses of deceased federal employees and former spouses of federal employees.