NEWS RELEASE

November 13, 2009
PR-09/39
For additional information:
Jason Hammersla
202-289-6700

PBGC deficit underscores need for funding relief

Rules to make funding obligations more predictable will strengthen plan sponsorship

WASHINGTON, D.C. — “The release of the Pension Benefit Guaranty Corporation’s (PBGC) deficit numbers underscores the need for pension funding relief legislation now under consideration in Congress. The $22 billion figure reported for the fiscal year ending September 30 is $11 billion greater than the figure for last year and $11 billion less than the projected figure just six months ago. This underscores the folly of determining pension plan funding rules on the basis of the volatile PBGC’s projected deficit or surplus which can vary enormously over the course of months,” said James A. Klein, president of the American Benefits Council.

“Pensions are long-term obligations and should be funded as such. The PBGC’s projected deficit is a function of changes in interest rates, market conditions and the likelihood that certain companies will or will not terminate their plans. If the government wants companies to continue sponsoring plans, then a smooth and progressive track to full funding is the proper course of action. That is what proposed bipartisan funding relief legislation is intended to accomplish,” said Klein.

“As lawmakers consider long-term solutions to stabilize the pension insurance program, they should focus on strategies that will shore up the PBGC while simultaneously improving financial security for Americans in retirement,” Klein said. “This means strengthening the employer sponsored pension system depends upon making defined benefit plans easier to administer. Immediate plan funding relief is the proper place to start.”

For more information, or to arrange an interview with Council staff, please contact Jason Hammersla, Council director of communications, at jhammersla@abcstaff.org or by phone at 202-289-6700 (office) or (202) 253-5458 (cell).

The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council’s members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.