Senate HELP Committee Urged to Oppose Protecting America's Pension Act of 2002

March 19, 2002

To Members of the Senate Health, Education, Labor, and Pension Committee:

The U.S. Chamber of Commerce, the world's largest business federation representing over three million businesses and organizations of every size, sector and region strongly urges you to oppose S 1992, the Protecting America's Pension Act of 2002, currently scheduled for markup by the Committee on Wednesday, March 20, 2002.

Under the guise of responding to the unfortunate Enron debacle, S 1992 in fact constitutes a radical revision of this nation's pension laws under the Employee Retirement Income Security Act (ERISA). Although what happened at Enron was wrong and indefensible and cannot be excused or trivialized, nothing in the record justifies the sweeping nature of this legislation, which has not been subject to even one legislative hearing.

The facts surrounding Enron are still developing and the exact contours of all that happened have yet to be fully established. Nevertheless, certain areas such as diversification and blackout periods have been identified as legitimate issues for review. S 1992, however, takes these areas of good faith debate and uses them to bootstrap massive changes to pension law which are, at most, only arguably tangentially related to the Enron situation or not related at all. Many of these changes seem more driven by a political agenda than substance. In adopting these tactics, the proponents of this legislation do a disservice to those they purport to protect and threaten the viability of a voluntary pension system under which employers have provided millions and millions of workers valuable benefits.

For example, the legislation provides for new causes of action in court and creates a new potential pool of defendants, without any demonstration that the already broad remedies under ERISA have proven to be inadequate to address the Enron situation. Indeed, massive litigation has already been filed and consolidated against Enron and numerous defendants in Tittle v. Enron Corp., pending in the Southern District of Texas—suggesting that ERISA does provide an adequate vehicle for redress. The limitations on arbitration, a favorite of the trial bar, reverse established case law and will result in more expensive court litigation. The bill imposes a requirement, long on organized labor's agenda, for joint trusteeships on single employer plans, with patently absurd election requirements, which will alone drive employers away from providing pension benefits and which has no understandable linkage to what happened at Enron. The prohibition on any plan providing employees with a choice of purchasing employer stock (no matter how knowing and voluntary) where the employer provides a match in company stock will only penalize thousands of employees who will financially benefit from owning a share in his or her company, as thousands have done in the past. While, of course, it is difficult to oppose greater disclosure requirements in the abstract it is important that we have a better understanding of what is imposed by this legislation and what their effect would be, particularly on small businesses. The requirements for mandatory insurance, particularly in view of the expanded liability provisions under the bill and during blackout periods, may in fact be literally unattainable in the real world. Lastly, Section 310 of the bill relating to collective bargaining plans has no conceivable connection to Enron and has been apparently included to simply give unions additional leverage at the bargaining table.

A section-by-section analysis of S 1992 is attached. As detailed as it is, the many issues raised by this legislation deserve much greater consideration than they have been given thus far. The misfortunes surrounding Enron deserve to be explored by the Congress and may, in fact, require some type of legislative solutions. But this does not justify the far reaching changes proposed by this bill which will do more to threaten the availability of pension benefits for America's workers than to preserve them.

We strongly urge you to vote no on S 1992.

Sincerely,

R. Bruce Josten
Executive Vice President
U.S. Chamber of Commerce