December 8, 2009

Action Requested:
With just over two legislative weeks left before the congressional recess there is a critical opportunity to move pension funding legislation forward. Congress will be considering a few "must do" pieces of legislation, such as legislation extending certain tax benefits as well as appropriations legislation. In addition, on December 9, Democratic members of the House Ways and Means Committee will meet to discuss possible jobs legislation. Now is a great opportunity to weigh in with all four of the committees that have pension jurisdiction – especially with the members of the Ways and Means Committee – to let them know how important it is to pass funding relief legislation.

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. The Council recently commissioned a study by Optimal Benefit Strategies, LLC, in support of relief legislation. Jobs in Peril: Assessing the Impact of Increases in Defined Benefit Plan Funding Obligations on Employment During an Economic Recession confirms that the current defined benefit funding crisis is more than a pension issue – it is a fundamental jobs issue and a critical economic recovery issue." Click here for the Council's news release unveiling the report. Recently, Rep. Earl Pomeroy (D-ND) and Rep. Patrick Tiberi (R-OH) introduced the Preserve Benefits and Jobs Act of 2009 (H.R. 3936). Davis & Harman has prepared a chart for the Council comparing the various legislative proposals.

Since time is short and there is a desire to tack onto funding relief other proposals we encourage all to urge against adding controversial and extraneous proposals that will weigh down funding relief and hurt companies abilities to address the funding issues now. In particular, as the Council reported in the November 24 Benefits Byte, Representative Lloyd Doggett (D-TX), has introduced the Retirement Fairness Act (H.R. 4126), which would amend the Internal Revenue Code to modify the nondiscrimination rules in qualified retirement plans, including defined benefit pension plans and defined contribution savings plans. The Council has prepared a series of talking points on H.R. 4126 expressing serious concerns about the bill's potential effects on employer-sponsored plans.

This is an opportunity to help American workers by allowing companies time to effectively manage the dramatically unexpected increased funding obligations that have resulted from the combined effects of the market turmoil in late 2008 and resulting prolonged recession, tight credit markets and the continued low interest rates set by the Federal Reserve.

PLEASE HELP:
Please contact committee members to urge their support for defined benefit pension plan funding relief. Links to the committees of jurisdictions follow.

House Ways and Means Committee

House Education and Labor Committee

Senate Health, Education, Labor and Pensions (HELP) Committee

Senate Finance Committee

To reach individual lawmakers, click on the lawmaker's name and then select the "Contact" tab. To send a letter through this Web site, click "contact … via Web form" and select "compose your own letter."

We are also preparing a letter from Illinois companies and from Maryland companies a draft of the Maryland letter] so if people have a connection to those states they are encouraged to sign on. If any of your companies operate in other states and want to work with companies from the same states as your operations please let us know and we will help facilitate these connections to have additional letters sent.

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.