January 11, 2010

Action Requested: Please consider signing a joint company letter urging all members of Congress to support funding relief for defined benefit pension plan sponsors. Specifically, the letter urges Congress to adopt temporary provisions that will ease cash flow constraints and make contributions more predictable and manageable. Contact Jason Hammersla, director, communications, to request a draft copy of the letter or to add your company's name to the letter.

Background: As we have previously reported, the accelerated funding requirements included in the Pension Protection Act and the market-driven declines in pension asset values have resulted in extreme and unanticipated jumps in upcoming pension obligations. While some legislative and regulatory relief has been provided, 2009 obligations still present a challenge for many employers and companies are now preparing for large obligations in 2010 and beyond. Significant concern has also been reported by companies indirectly affected by the increased obligations, such as suppliers and buyers of products or services rendered by affected companies.

The Council has repeatedly and consistently expressed concern to Congressional representatives and their staffs about job loss resulting from a lack of defined benefit plan funding relief. Despite a recent push for a unanimous consent agreement for temporary relief in both the House of Representatives and the Senate, the lack of time remaining in the year and other legislative priorities prevented lawmakers from reaching an agreement.

Congress has indicated that a narrow, temporary measure could be considered soon. Efforts continue at the Congressional staff level to move forward with legislation in the House, where the Preserve Benefits and Jobs Act of 2009 (H.R. 3936) and the 401(k) Fair Disclosure and Pension Security Act (H.R. 2989) each contain funding relief provisions. The Senate process is moving slower, with some lawmakers expressing a preference for broader, wide-ranging retirement legislation. On December 22, the Council signed on to a joint employer letter to President Obama urging his support "in enacting legislation as soon as possible to provide much-needed relief for both single employer and multiemployer pension funds."

PLEASE HELP: Your company’s signature on this letter is critically needed if we are to build a sufficient level of interest in legislation. Signatures are needed no later than the close of business on Friday, January 15. To sign on to the letter, please reply or click here and indicate your company's name exactly as you would like it to appear.

This letter is being sent jointly by a wide group of trade associations to provide a unified message to Congress and the Administration. If your company confirms through another trade group it would be helpful for us to also have confirmation.

To discuss the joint company letter or for more information or assistance, please contact Lynn Dudley, senior vice president, policy; Diann Howland, vice president, legislative affairs; Ken Porter, senior vice president, international benefits and chief actuary; or Jan Jacobson, senior counsel, retirement policy; at (202) 289-6700.