Date: 2006-04-06
Speaker: GEORGE MILLER (democrat)
Chamber: H
State: California

Mr. Speaker. I yield. myself 7 minutes. Mr. Speaker. I offer a motion to instruct conferees on H.R. 2830. the Pension Protection Act. The Senate appointed conferees on March 3 and the House on March 8. and yet 1 month later it appears almost no progress has been made. In fact. I actually would say that the conference seems to have gone backwards. Senator ENZI. the conference chair. promised that there would be an open and bipartisan conference. Mr. Leader BOEHNER promised the same. Instead. both meetings have been held in secret by a small group of Republican conferees. There are a lot of important issues pending in the pension conference. Every day employers are dumping their pension plans and millions of workers are deeply worried about their retirement security and whether or not they will have sufficient funds for their retirement to support their families. One of the key issues pending in the conference is whether or not older workers willbe protected When employers convert..their traditional defined benefit plans to a socalledcash balance plan. It is a critical issue for millions of American workers. and it is not a new issue to this House. During the 1990s. hundreds of large employers switched to these cash balance plans. including IBM. whose conversion was ruled illegal. As many as 8 million workers have been affected by these cohversions. many of them. perhaps half of them. experienced deep cuts in their pension benefits as a result of these conversions. Lets be clear. Companies promised these benefits to these workers. These workers earned these benefits. Then with some paperwork and a little fancy accounting footwork. companies slashed the benefits of these workers. How did the companies do it? First. the benefits of the traditional pension plan are based upon the workers pay at the end of their careers and when they are earning the most. Cash balance plans. on the other hand. are based on workers average pay over the course of their career. With just a simple change on how benefits are calculated. companies can devastate the retirement nest eggs of hardworking employees. workers who gave up wages. who gave up vacation days. who gave up all kinds of benefits as they balanced out their pension plans. Yet we now see companies unilaterally essentially destroying the pension benefits that those workers are entitled to. Older workers under these conversions can lose up to half. half of their expected retirement benefits. Dont take my word for it. That is according to the Government Accountability Office. They tell us that that is what happens to older workers. This chart shows exactly what happens. This is what would happen to the workers who went into the workforce at age 25 and worked for a company. They would see their traditional retirement benefits continue to go up. With a cash balance plan. the retirement benefits go down. For the older workers. this is what they stand to lose. For anyone over about the age of 46. 47 years old. they have a substantial change in the pension benefit that they were counting on. Obviously. for these workers out here. at age 55. it is very difficult. if not impossible. to see how they would recover a sufficient amount of savings to provide for the retirement that they were planning on at that time. And it gets worse if you are 60 years old.- So anybody after 45 years of age is greatly disadvantaged under these plans. And that is what is going on in the pension conference committee. is whether or not we will have the opportunity to provide for thoge older workers. What we now see is that IBM did this and the court stopped those conversions in 1999. The House voted overwhelmingly on several occasions in support of amendments urging the protection of older workers. The Bush administration first tried.to lift the moratorium and legalize these conversions. But after 218 Members of the House or the Congress urged the President to reconsider. he withdrew that proposal. The Bush administration changed its position and has submitted proposals that do more to help the older workers. As part of the pension funding reform legislative debate. Senators Baucus. Kennedy. Frist. Grassley. Hatch and Lott brokered a compromise.-The compromise largely follows the Bush administration proposal and was passed by the Senate 972. This motion to instruct that I- am offering today urges the conferees to. support the Senate compromise on protecting older workers in the cash balance conversion. The Housepassed bill contains no protection for older workers and would actually legalize some of the worst employer practices that jeopardizes worker retirement security and their retirement nest eggs.