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Archived News Release--Caution:
information may be out of date.
For more information call: (202) 219-7316.
Secretary of Labor Robert B. Reich, chairman of the board
of the Pension Benefit Guaranty Corporation, today issued the following
statement as Congress prepared to consider legislation permitting reversion of
money from corporate pension plans:
"The legislation that Congress is considering this week is
exactly the wrong thing to do. At a time when there is widespread agreement
that we need to strengthen pensions and increase the savings rate, this
legislation sends absolutely the wrong signal.
"I strongly support Congressman Matsui's proposal to strip
this pension grab out of the reconciliation bill that will be on the House
floor tomorrow. And I support efforts to do the same thing in the Senate.
"I called this a pension grab and that's what it is, pure
and simple. It's an attempt to turn the clock back to the 1980s, when companies
raided tens of billions of dollars from the private pension system and
undermined confidence in the system. During those years, there were no
restrictions on pension plans and we saw the result - billions of dollars were
taken out of the pension system, and much of the money went to pay for
corporate takeovers.
"The practice continued until Congress wisely put a stop
to it with excise taxes. Now, Congress is about to remove the safeguards which
have strengthened the pension system.
"And let's remember whose money will be taken - it will be
the money earned by America's working people to pay for their retirement, money
they will need to take care of themselves.
"The fact is simple and bears repeating: a plan which is
overfunded today can quickly become underfunded next week. Changes in asset
values and interest rates can reduce funding levels. Companies in financial
trouble will have an incentive to strip assets from pension plans.
"As Congress considers this legislation, one fact should
be kept in mind -- last year, the pension insurance system was already running
a deficit of $1.2 billion.
"When this administration took office, we moved quickly to
address the serious problems we found with underfunded pensions. And last year,
Congress acted on a bipartisan basis to pass our Retirement Protection Act.
This legislation would undo the protections in that legislation. This proposal
should be rejected.
"As chairman of the board of the Pension Benefit Guaranty
Corporation, I'm worried about the pensions of 41 million Americans. For that
reason, I urge the House and Senate to halt this pension raid - - and I commend
the members here today for protecting America's working men and women.
Archived News Release--Caution:
information may be out of date.
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