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OPA News Release: [03/08/2005]
Contact Name: Jane Norris or Gloria Della
Phone Number: 202-693-4676
Release Number: 05-0375-NAT

Labor Department Testifies Before House Ways and Means Subcommittee On Administration’s Pension Reform Proposal

WASHINGTON—Ann L. Combs, assistant secretary of labor for employee benefits security, today testified before the House Ways and Means Subcommittee on Select Revenue Measures regarding the Bush Administration's pension reform proposal to strengthen the retirement security of private, single employer defined benefit pension plans. Combs' testimony focused on changing the funding rules to ensure that retirement plans are adequately funded; increasing disclosure of information to workers about their plans; and improving the structure of the pension insurance system.

“Termination of plans without sufficient assets to pay promised benefits has a very real cost. Workers' and retirees' expectations are shattered and, after a lifetime of work, they must change their retirement plans to reflect harsh, new realities,” said Combs. “Our proposal would strengthen the funding rules and stabilize the defined benefit system, so that workers and retirees can be confident of the secure retirement they have worked for all their lives.”

In her testimony, Combs discussed key elements of the Administration's plan, including:

• a single, accurate way to measure pension fund liabilities, replacing an existing system that is overly complex, confusing and ineffective;
• flexibility for solvent companies to make more generous contributions to pension plans during good economic times;
• restrictions on the ability of financially strapped companies to promise more benefits than they can pay for;
• measures to ensure the long-term solvency of the Pension Benefit Guaranty Corporation.

“We look forward to working with Members of this Committee to achieve greater retirement security for the millions of Americans who depend on defined benefit plans,” Combs concluded.

The full text of today's testimony is available on the Labor Department's Web site at www.dol.gov/ebsa under Administration's Pension Reform Proposal.

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