- Dec 5, 2003
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US House OKs pension funding overhaul bill
Thu Dec 15, 2005 04:38 PM ET
(Adds details, background)
WASHINGTON, Dec 15 (Reuters) - Legislation aimed at reinforcing the creaking system of traditional pensions and avoiding a taxpayer bailout of the agency that insures them was passed on Thursday by the U.S. House of Representatives.
The measure overhauls funding rules for employer-provided pensions, a fading feature of old-economy companies, and raises premiums companies pay to the federal insurance agency, the Pension Benefit Guaranty Corp. (PBGC). It passed 294-132.
The next step is negotiations with the Senate, which already has passed its own version of the bill. But the White House has warned that the final product must have tougher pension funding rules if Congress wants to avoid a veto.
The House bill requires companies to erase shortfalls in their "defined benefit" pension plans and pay higher premiums to the PBGC, in hopes of avoiding a taxpayer bailout of the agency.
As a group, traditional pensions are underfunded by some $450 billion, and the PBGC is $22.8 billion in the red, its deficit swelled by bankruptcy filings in the airline and steel industries.
But unlike a White House proposal, both the House and Senate bills phase in the new pension funding requirements and premium increases over time.
The author of the House bill, Ohio Republican Rep. John Boehner, said this was because he did not want to drive companies out of the traditional pension system. His first goal, Boehner said, was to "make sure that companies that offer defined benefit pension plans continue to keep them."
Opponents said Boehner's bill would nonetheless prompt many companies to freeze workers' benefits. But dozens of Democrats backed the legislation, encouraged to do so by the support of major unions such as the United Auto Workers.
The Senate version includes special aid for struggling airlines that is not in the House bill. But Boehner said he was committed to dealing with the issue during House-Senate talks.
Thu Dec 15, 2005 04:38 PM ET
(Adds details, background)
WASHINGTON, Dec 15 (Reuters) - Legislation aimed at reinforcing the creaking system of traditional pensions and avoiding a taxpayer bailout of the agency that insures them was passed on Thursday by the U.S. House of Representatives.
The measure overhauls funding rules for employer-provided pensions, a fading feature of old-economy companies, and raises premiums companies pay to the federal insurance agency, the Pension Benefit Guaranty Corp. (PBGC). It passed 294-132.
The next step is negotiations with the Senate, which already has passed its own version of the bill. But the White House has warned that the final product must have tougher pension funding rules if Congress wants to avoid a veto.
The House bill requires companies to erase shortfalls in their "defined benefit" pension plans and pay higher premiums to the PBGC, in hopes of avoiding a taxpayer bailout of the agency.
As a group, traditional pensions are underfunded by some $450 billion, and the PBGC is $22.8 billion in the red, its deficit swelled by bankruptcy filings in the airline and steel industries.
But unlike a White House proposal, both the House and Senate bills phase in the new pension funding requirements and premium increases over time.
The author of the House bill, Ohio Republican Rep. John Boehner, said this was because he did not want to drive companies out of the traditional pension system. His first goal, Boehner said, was to "make sure that companies that offer defined benefit pension plans continue to keep them."
Opponents said Boehner's bill would nonetheless prompt many companies to freeze workers' benefits. But dozens of Democrats backed the legislation, encouraged to do so by the support of major unions such as the United Auto Workers.
The Senate version includes special aid for struggling airlines that is not in the House bill. But Boehner said he was committed to dealing with the issue during House-Senate talks.
