Representative John Boehner (R-Ohio), chairman of the Education & the Workforce Committee said in a press release on his Web site, “With today’s vote, we seized the opportunity to advance real change by passing the most comprehensive reforms to worker pension laws in more than a generation.”
Differences between the bill and a previously-passed Senate pension bill (See Senate OKs Compromise Version of Pension Reform Measure ) must now be resolved in a conference committee before a final measure can be sent to President Bush for his signature, according to the release.
Strong support was given for the bill by the UAW after modest modifications were agreed on yesterday (SeeUAW Support Secured for House Pension Reform Bill). The Profit Sharing/401(k) Council of America (PSCA) also expressed strong backing for the bill due to provisions affecting defined contribution plans (See PSCA Pushes for DC Provisions in House Pension Reform). The Pension Protection Act calls for the Economic Growth & Tax Relief Reconciliation Act (EGTRRA) to be made permanent, something the Senate pension reform measure does not include.
In a statement praising the bill’s passage on the PSCA Web site, PSCA President David Wray said, “It is hard to overstate the importance of making the EGTRRA pension provisions permanent. Moving into a regime of lapsed rules and intermittent short term extensions will be catastrophic for the employer provided retirement system. PSCA will devote all its resources to ensuring that the conference agreement with the Senate retains this key provision.”
Other groups in strong support of the bill include the United Brotherhood of Carpenters & Joiners of America, the US Chamber of Commerce and the Financial Services Roundtable.
The news release notes that The Pension Protection Act includes new funding requirements to ensure employers adequately and consistently fund their pension plans, provide workers with disclosure about the financial status of their benefits, and protect taxpayers from a possible multi-billion dollar bailout of the Pension Benefit Guaranty Corporation (PBGC) should the agency’s financial condition continue to deteriorate.
- Closes loopholes and reforms pension funding rules to ensure that employers fully fund promised worker benefits;
- Provides restrictions on the use of credit balances if plans are funded at less than 80%;
- Allows employers to make additional maximum deductible contributions of up to 150% of current liability;
- Includes restrictions to ensure employers and union leaders cannot increase benefits if a plan is less than 80% funded;
- Raises premiums employers pay to the PBGC but phases the increase in over time;
- Ends the legal uncertainty surrounding cash balance plans
- Includes reforms for multiemployer plans and provides quantifiable benchmarks for measuring a plan’s funding improvement; and
- Provides additional information to workers about the status of their plan.
A summary of provisions of the Senate pension reform bill on the PSCA Web site can be viewed here .
Information about the Bush Administration’s pension reform proposal is here .