NEWS RELEASE

November 5, 2008
PR-08/27
For additional information:
Jason Hammersla
202-289-6700


Council reacts to Democratic presidential, congressional victories

Staff available to comment on implications for health and retirement policy

WASHINGTON, D.C. — "The American Benefits Council congratulates and looks forward to working with the winners of yesterday's elections to protect the personal financial security for workers and retirees," said Council President James A. Klein. The Council represents major employers and other companies that sponsor or provide services to health and retirement plans covering more than 100 million Americans.

"It has become conventional wisdom over the past several weeks that the current economic turmoil means that health or retirement reforms may need to wait given more urgent economic recovery priorities. We take the opposite view. In fact, addressing the health and retirement policy challenges is an integral element of — rather than an obstacle to — economic recovery," Klein said. Key issues include:

Health care: "We agree with President-elect Obama that reforming our health care system is a national priority. We urge the President-elect and the incoming Congress to work within ERISA's established federal framework to ensure consistent coverage and benefits for employees of large companies, no matter where they live. And although the challenge of improving coverage has been the dominant health care theme during the campaign, improving quality and containing costs are equally important," Klein said.

Retirement policy: "The most urgent retirement security issue facing our nation needs to be resolved before President-elect Obama even takes office. Immediate measures that we have outlined in recent weeks must be enacted to prevent accelerated funding requirements – exacerbated by recent economic volatility – from triggering a wave of pension plan freezes and job cuts. It is imperative that Congress return for a lame-duck session and that President-elect Obama bring his influence to bear for a swift resolution to this problem," Klein said. "Longer-term, the new Administration and Congress must recognize that encouraging savings represents not only a source or retirement income security, but also boosts investment capital so vital to economic recovery," Klein added.

Taxes: The Obama Administration and the 111th Congress will be compelled to deal with tax issues, because most of the provisions enacted in 2001 and 2003 will expire after 2010. Since the presidential campaign focused on economic relief for the middle class, it is imperative that public policy preserve the tax incentives for employer-sponsored health coverage, as well as retirement savings programs like 401(k) plans.

Entitlement reform: "Reforming Social Security and Medicare will be politically painful and, once again, conventional wisdom would seem to dictate that these long-term challenges will not be priorities over the next two or even four years. But the new President and Congress must acknowledge that the longer needed reforms are delayed, the more painful the solutions will be. Moreover, there are few things lawmakers could do to better demonstrate their commitment to short term economic recovery, than to demonstrate that they are thinking long-term. When businesses and individuals see that the United States is serious about tackling our long term problems, they will be encouraged to make the investments needed to help lift the country out of its economic malaise. Coordinating reform of these public programs with employer-sponsored health and retirement plans is critical," Klein said.

"In our nation's history, the most enduring legislative accomplishments are those born out of bipartisanship," Klein said. "We look for lawmakers to work together and fortify our economy by strengthening employer-sponsored benefits."

Council staff is available to provide more detailed analysis of the election's implications for employee benefit plans. To arrange an interview with a member of the Council staff, please contact Jason Hammersla, Council director, communications, at jhammersla@abcstaff.org or by phone at (202) 289-6700.

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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 Councils member's 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.