NEWS RELEASE

July 23, 2014
NR 2014-15

For additional information:
Jason Hammersla
office 202-289-6700 / cell 202-422-4652

Council applauds passage of ERISA 'shutdown benefits' bill

WASHINGTON, DC — The American Benefits Council applauds the Senate Health, Education, Labor and Pensions Committee's approval of S. 2511 today relating to pension plans and cessation of a company's operations. Specifically, if an employer with a pension plan shuts down operations at a facility - and as a result, more than 20 percent of the employer's employees who are plan participants are separated from employment - the employer must provide the Pension Benefit Guaranty Corporation (PBGC) with short-term financial guarantees in the form of a bond or escrow amount based on the plan's unfunded termination liability.

The bill institutes a number of common-sense measures to clarify the language of the long-standing statutory provision. "This measure returns enforcement of the law to its original purpose," said Council President James A. Klein.

"In recent years, the PBGC's enforcement policy has given rise to significant compliance challenges and large unexpected liabilities for many companies that have engaged in normal business transactions (such as the sale of a very small business unit or the consolidation of small operations at different facilities) where there is no actual cessation of operation," Klein said.

"We applaud Committee Chairman Tom Harkin (D-IA) and ranking Republican member Lamar Alexander (R-TN) for their leadership on this issue. We look forward to working with lawmakers who support retirement security as this measure is considered by the full Senate and, hopefully, its ultimate enactment," Klein said.

For more information on defined benefit plans, please contact Jason Hammersla, Council director of communications, at jhammersla@abcstaff.org or by phone at 202-289-6700 (office) or (202) 422-4652 (cell).

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The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council's members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.