Chamber Support for H.R. 3108, the Pension Funding Equity Act of 2003
October 8, 2003
The Honorable William M. Thomas
United States House of Representatives
2208 Rayburn House Office Building
Washington, DC 20515
Dear Chairman Thomas:
I am writing on behalf of 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, regarding H.R. 3108, the Pension Funding Equity Act of 2003. The House of Representatives is expected to vote on this legislation, which would replace the 30-year Treasury bond interest rate.
The U.S. Chamber appreciates the attention and bipartisan support of the Chairmen and Ranking Members of the House Education and the Workforce and Ways and Means Committees on this important issue. The 30-year Treasury rate must be replaced immediately. Without an immediate replacement of the 30-year Treasury rate, many plan sponsors will be forced to freeze or terminate their plans, leaving many workers without these vital retirement benefits. We applaud the proposal's replacement of the 30-year Treasury bond rate with a conservative, long-term corporate bond rate and urge the House to expeditiously move H.R. 3108.
Under the current circumstances, employers are uncertain about their future funding obligations and are, therefore, uncertain about their ability to maintain defined benefit plans. While H.R. 3108 provides a stable replacement, the limited duration of the replacement leaves employers uncertain about the future. A majority of employers make financial forecasts five years into the future. Therefore, the Chamber would have preferred the two-year temporary fix to be in effect for a longer period of time. A replacement rate of five years would provide employers with the stability and certainty necessary to ensure accurate financial planning. However, we appreciate the political realities of Congress and the willingness of the committees of jurisdiction wanting to get to a permanent replacement of the 30-year Treasury as soon as possible.
We thank the House for moving quickly on this important issue and look forward to working with you to protect America's employer-provided retirement system.
R. Bruce Josten
Executive Vice President, Government Affairs
U.S. Chamber of Commerce