NEWS RELEASE

November 29, 2012
PR-12/21
For additional information:
Jason Hammersla
202-289-6700
202-422-4652 (cell)

Council issues six-point plan for saving employee pensions

Legislative, regulatory action necessary to address exodus from defined benefit system

WASHINGTON, DC — The American Benefits Council has unveiled a six-point plan to address the ongoing, accelerated decline in defined benefit pension plans. While these plans numbered roughly 175,000 three decades ago, the most recent data indicates that fewer than 47,000 plans are active today.

"There are many reasons for the long-term decline, including funding and accounting volatility, competitive pressures, employee preferences, and workforce changes," Council President James Klein said. "Recently, the decline has markedly accelerated due to the unpredictability of additional costs."

The Council's six-point plan responds to these pressures in a way that addresses some of America's looming economic challenges. "These proposals would raise tens of billions of dollars of revenue and help to create jobs by preventing unnecessary diversion of company assets and stimulating business expansion," Klein said.

The six points, described fully in the document, are:

    (1)   Funding stabilization must be made permanent.

    (2)   Pension accounting standards must be stabilized.

    (3)   Pension Benefit Guaranty Corporation (PBGC) insurance premiums need to be based on stable long-term assessments of need.

    (4)   Businesses should not be prevented by the PBGC from engaging in necessary and positive business transactions.

    (5)   Congress, the U.S. Treasury Department and the Internal Revenue Service must avoid developing nondiscrimination rules that encourage pension plan closures.

    (6)   Workable rules for hybrid pension plans are critical.

The Council is urging lawmakers to consider these proposals as they fashion a plan to address the federal deficit, economic growth and tax and entitlement reform.

For more information on defined benefit pension plans and the Council's six-point plan, or to arrange an interview with Council policy staff, please contact Jason Hammersla, Council director of communications, at jhammersla@abcstaff.org or by phone at 202-289-6700 (office) or (202) 253-5458 (cell).

# # #

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.