American Benefits Council

Congressman Earl Pomeroy (D-ND) to join with business & labor leaders to highlight urgent need for action on overlooked bipartisan issue

MATERIALS FOR THIS PRESS EVENT AVAILABLE AT:
http://snipurl.com/dbfunding

February 4, 2010: Thursday, February 4, at 11:00 a.m. Eastern Time, a coalition of business, labor, and non-profit leaders will join with Congressman Earl Pomeroy (D-ND) on a telephonic press conference call to call for pension funding relief – an urgent, yet overlooked, issue that will act as a catalyst for our nation’s economic recovery if Congress addresses the issue or that will become a huge obstacle to economic growth if it continues to be ignored.

Also appearing on the call will be Kathy Cloninger, CEO, and Florence Corsello, CFO, with the Girl Scouts of America; Barbara Crane, RN, President of the National Federation of Nurses; Katy Beh Neas, Vice President, Government Relations with Easter Seals; and James A. Klein, American Benefits Council President.

Due to unprecedented economic turmoil and market volatility, pension plans are facing massive losses in their asset values. As a result, billions of dollars that could be pumped into the economy today and help to save or create jobs are now scheduled to be diverted into pension plans unless Congress acts quickly.

Pension relief legislation, like the bill introduced by Rep. Pomeroy along with Rep. Pat Tiberi (R-OH), would provide a temporary extension to the period that employers have to fully fund their defined benefit pension plans — leaving them with more cash on hand to save and create jobs, while helping to spur capital investment and raise new federal revenue. Without immediate action, this looming pension crisis threatens to derail economic recovery and could lead to even higher unemployment.

A broad coalition of non-profit charities, labor unions, corporations, and lawmakers from both political parties supports pension funding relief. Hear directly from these leaders about the importance of pension funding relief this Thursday, February 4, at 11:00 a.m. Eastern Time.

Call-in Number: 1-800-895-1241, Passcode: “PENSIONS”

Council and other organizations call on Congress to address potential cuts in dental and vision plans
January 12, 2010: The American Benefits Council along with the American Dental Association (ADA), the Communications Workers of America and other organizations, sent letters urging House and Senate leaders to eliminate or substantially modify the excise tax on health benefits, including flexible spending accounts (FSAs), to ensure the final health care reform legislation does not adversely impact key and important goals of health reform like primary and prevention-oriented care.

"The health care reform debate has never centered on dental, vision and other supplemental benefits," said James A. Klein, Council president. "Those valuable benefits have only been included in the calculation of the excise tax to raise revenue. Several modifications are needed to improve the excise tax provision, including not applying the tax to these important supplemental benefits."

Senate health care reform measure still does not meet test of strengthening employer-sponsored health coverage
December 24, 2009: With the Senate poised to approve sweeping health care reform legislation, the American Benefits Council expressed its views regarding the final version of the Patient Protection and Affordable Care Act (H.R. 3590). In a letter to the Senate, Council President James A. Klein stated: “Sound health care reform legislation must protect the vitality of – and indeed strengthen – the employment-based health care coverage system that serves the vast majority of Americans. Regrettably, taken as a whole, the Senate bill still does not meet that test. Accordingly, the Council is not able to support the Patient Protection and Affordable Care Act.”

See the full news release here.

Employers, organized labor tell Reid: taxation of Medicare drug subsidy will threaten retiree health programs
Council, AFL-CIO urge elimination of provision from Senate bill, host media briefing with former CMS administrator Tom Scully

December 10, 2009: On Thursday, December 10, the American Benefits Council and the AFL-CIO sent a letter to Senate Majority Leader Harry Reid (D-NV) urging the elimination of a little-discussed but potentially harmful provision in the Senate health care reform bill. As currently crafted, the Patient Protection and Affordable Care Act (H.R. 3590) would impose a new tax on prescription drug subsidies for Medicare-eligible seniors.

In a conference call briefing for the media on December 10, Council President James A. Klein and AFL-CIO Assistant to the President Gerald Shea explained the catastrophic effect this provision could have on employers, workers, the Medicare program and American financial markets. Tom Scully, former administrator of the Centers for Medicare and Medicaid Services, who wrote an op-ed in the December 7 Wall Street Journal criticizing the provision, also spoke at the media briefing.

Additional illustrative materials were also provided at the briefing:

Click here for more information on this issue.

Click here for a link to a recording of the media briefing.

Council research report: pension funding relief critically necessary to preserve jobs, promote economic recovery
Enactment of relief legislation, such as Pomeroy-Tiberi bill, urgently needed
October 30, 2009: “The research report Assessing the Impact of Increases in Defined Benefit Plan Funding Obligations on Employment During an Economic Recession, prepared by Optimal Benefit Strategies, LLC and commissioned by the American Benefits Council, clearly confirms what employers have been saying for months,” said Council President James A. Klein today. “The current defined benefit funding crisis is more than a pension issue. It is a fundamental jobs issue and a critical economic recovery issue.”

Drawing on academic research, congressional testimony and economic analysis, the report clearly demonstrates an inverse relationship between pension funding obligations and revenue available for labor and capital expenditures. “Requiring employers to increase their funding to defined benefit plans during a recession leads to layoffs, bankruptcies, and the freezing of defined benefit plans, suggesting that the pension funding obligations could fundamentally alter the distribution of jobs in the economy,” the report reads. Among the paper’s revelations citing previously conducted research and surveys:

Fully 68 percent of defined benefit plan sponsors indicated that unexpected cash needs associated with their defined benefit plans would cause the employer to make other cuts, including cuts in the areas of hiring and workforce training.
For every dollar of mandatory funding contributions, between 60 to 70 cents is diverted from capital expenditures such as infrastructure and human resources.
In years of contraction, defined benefit plan funding requirements are alone responsible for 4 percent of the reduction in employment.

“The accelerated funding requirements included in the Pension Protection Act, combined with the market-driven declines in pension asset values and historically low interest rates, have created unprecedented and unforeseen challenges for employers that voluntarily provide generous retirement benefits,” Klein said. “Broadly available, temporary funding relief legislation — like the Preserve Benefits and Jobs Act, introduced this week by Representatives Earl Pomeroy (D-ND) and Pat Tiberi (R-OH) — will allow employers to mitigate the losses brought about by this deep recession. We urge Congress and the Obama Administration to support this critical legislation and move swiftly toward its enactment.”

The following materials are also available for additional background:

A digital recording of the Council's October 30 media briefing on defined benefit pension funding and economic recovery, in which the Council released the report, is now available.

Click here to download the recording.

Council President James Klein speaks on Marketplace Radio
Discusses need for defined benefit pension reform

New Survey: Three Out of Five Employers Maintain 401(k) Plans Despite Economic Crisis
Seven in ten eligible employees participated in 401(k) plans in 2008
March 17, 2009: A new survey of employers released by WorldatWork and the American Benefits Council, "Trends in 401(k) Plans," presented today at a National Press Club Newsmakers press conference in Washington, DC, finds that the financial crisis has not significantly discouraged 401(k) contributions or participation. A full 74 percent of employers reported no change in the employer matching contribution; 15 percent have either increased or are considering increasing the employer match; eight percent have either decreased or are considering decreasing the 401(k) match, and three percent reported eliminating the match.

According to the survey, more than nine out of ten U.S. companies offer an employee 401(k) plan. In addition, despite the widely reported drop in account balances, two-thirds (66 percent) of organizations indicated that at least 70 percent of eligible employees participated in those 401(k) plans in 2008.

This survey was conducted in December 2008 by WorldatWork, in collaboration with the American Benefits Council. Surveys were sent electronically to a random representative sample of 4,938 U.S. WorldatWork members. A total of 505 members participated in this survey during a two-week period, generating a 10-percent response rate. For more details about the survey and contact information, see the official news release.

Council to unveil health care proposal, featuring key players from previous reform efforts to answer questions
‘Condition Critical’ report offers 44 specific recommendations for consideration in stimulus bill, comprehensive reform legislation
Monday, January 12: At noon Eastern Time, the American Benefits Council will hold a special media briefing to unveil "Condition Critical: Ten Prescriptions for Reforming Health Care Quality, Cost and Coverage." This report was developed by the Council’s board of directors with the goal of reforming health care through the employer-sponsored benefits system. The Council will be joined by a number of independent experts and advisors, who will discuss the report in the context of the greater health care reform debate.

The following items were unveiled at the briefing: Condition Critical: Ten Prescriptions for Reforming Health Care Quality, Cost and Coverage

PowerPoint Slides on the release of Condition Critical

Fast Facts on Health Care Reform/2008 Survey Results

"This report covers a wide range of controversial topics, including individual mandates, tax policy and health care quality initiatives, some of which may be considered as part of the economic stimulus package," said Council president James A. Klein. "The Council’s ‘ten prescriptions’ provides 44 specific policy recommendations that can be implemented quickly."

The briefing will be held in person at the conference center at 1455 Pennsylvania Avenue NW, 4th floor, Washington DC. (Entrance on F St.) Lunch will be served for those attending in person. Reporters may also attend the briefing via conference call.

For RSVP information or an embargoed copy of the report, please contact Jason Hammersla, Council director of communications, at 202-289-6700 (office) or (202) 253-5458 (cell).

‘Safe and Sound’ retirement goals include raising financial literacy, expanding coverage
November 8:"The current voluntary employer-sponsored retirement system has been an enormous success," said Lynn Dudley, American Benefits Council vice president, retirement policy, at a hearing before the House of Representatives Health, Employment, Labor and Pensions (HELP) Subcommittee of the Education and Labor Committee. "The magnitude of America’s demographic challenges now dictates that individuals, employers and the government all need to do more to continue this success and ensure widespread retirement security."

Dudley’s testimony was drawn from the Council’s 2004 report Safe and Sound: A Ten-Year Plan for Promoting Personal Financial Security, which contains specific goals for improving retirement coverage and savings and discusses the responsibilities of the key stakeholders.

"The fact that individuals will be called upon to play a greater role in achieving personal financial security does not mean that employers or the government will be doing less," Dudley said. "As individuals play a more prominent role in achieving their own personal financial security, employers and the government will be expected to help provide the tools to more simply and successfully play this larger role."

The full text of the Council's media release is available in the Newsroom.

Benefits Byte (02/04/10)

Council Joins with Rep. Pomeroy, Others to Urge Pension Funding Relief

DOL Issues Model Employer CHIP Notice of Premium Assistance

ERISA Advisory Council Announces Appointments

Click here for details.

Health Care Reform: The legislative process winds down

The Council's Health Care Reform Issue Page

As Congress moves closer to a final health care reform bill, this section of our home page will provide up-to-the-minute updates, documents and other resources as the negotiations unfold.

Council Materials: The Council has prepared a comprehensive list of priority issues for employers, citing necessary improvements to the House of Representatives- and Senate-passed measures.

In addition, Council staff has prepared a detailed side-by-side chart comparing the House and Senate bills and providing the Council perspective on key issues.

On December 22, Council President James A. Klein wrote to the Senate, “Sound health care reform legislation must protect the vitality of – and indeed strengthen – the employment-based health care coverage system that serves the vast majority of Americans. Regrettably, taken as a whole, the Senate bill still does not meet that test. Accordingly, the Council is not able to support the Patient Protection and Affordable Care Act.”

For more information, contact Paul Dennett, senior vice president, health care reform, at (202) 289-6700.