Pomeroy Criticizes PBGC for Silence on Pension Funding Rule Adjustments

November 26, 2008 (PLANSPONSOR.com) - Congressman Earl Pomeroy (D-North Dakota) again questioned the Pension Benefit Guaranty Corporation's stance on easing the funding requirements for pension plans in a letter to PBGC director Charles E.F. Millard.

A Pomeroy news release said that when Millard testified before the Ways and Means Committee in late September he stated that the administration had no position on adjusting the pension funding requirements enacted in the Pension Protection Act.  However, as Congress was developing legislation to address the dire financial situation facing pensions (See New U.S. Senate Legislation Would Help Pensions ), the agency actively lobbied against the legislation and expressed its concerns with adjusting pension funding requirements. 

No decision on the legislation was made before Congress adjourned for recess (See Senate Leaves Town with Pension Aid Bill Untouched ).

At the September hearing Pomeroy asked Millard for the PBGC’s recommendation on how Congress might adjust the funding rules for pensions, and no response has been given, according to the news release.

“As the hearing adjourned, I personally asked you for the PBGC’s recommendation on how Congress might adjust the funding rules for pensions.  This request was in line with your role as the Director of the PBGC and your responsibility under the Employee Retirement Income Security Act (ERISA) ‘to encourage the continuation and maintenance of voluntary private pension plans for the benefit of their participants,'” Pomeroy said in his letter. “I am disappointed that no response has been forthcoming.”

Pomeroy continued: “Only as this legislation was ready to move did the PGBC offer its concerns albeit without any documentation to support its position.  Analysis of the situation by others suggests that not acting would cause much broader harm to workers and pose greater liabilities to the PBGC.”

The letter said the failure to respond to Pomeroy’s request “suggests that the PBGC and the administration have no plan to help workers and employers except to suggest that Congress should wait and see what happens to pensions over the next few years.”  Pomeroy called that idea as “unacceptable as it is irresponsible.” 

In addition, Pomeroy chastised that “To offer last minute, undocumented arguments against modest proposals targeted to address the fallout from the market turmoil on pensions demonstrates blatant disregard for the seriousness of plan sponsors in addressing their pension obligations and the retirement security worries of 20 million American workers and retirees.”

Pomeroy again asked for Millard’s recommendations and said he will ask his office to schedule a meeting for the week of December 8.