Letter Oppossing the Miller Amendment
May 14, 2003
To Members of the United States House of Representatives:
On behalf of the U.S. Chamber of Commerce, representing three million businesses and organizations of every size, sector and region, I would like to express our opposition to the Miller Amendment in the Nature of a Substitute to H.R. 1000, the Pension Security Act, which is to be considered by the House today.
H.R. 1000 is essentially the same bill that passed by the House last year without those provisions already enacted as part of Sarbanes-Oxley. It was, and is, legislation narrowly targeted at the abuses carefully documented as arising from the unfortunate Enron debacle. The Miller amendment, in contrast, sweeps far more broadly, has had little analysis and imposes new complex limitations on companies and plan sponsors with unforeseeable consequences.
It bears repeating that the Enron situation raised certain areas such as unreasonable restrictions on the diversification of company stock, employee disclosure and advice, and blackout periods as legitimate issues for review and legislative action. The Miller amendment takes these areas of good faith debate and uses them to bootstrap massive changes to pension and other areas of the law which are, at most, only tangentially related to the Enron situation or not related at all. For example, the amendment will restrict executive pension plans and executive stock options and impose new disclosure requirements during the collective bargaining process. These and other extensive provisions, with unexplored consequences, do not address the documented problems raised by Enron nor do they provide additional security to the pension system. On the contrary, limiting the ability of employers to attract and maintain skilled executives and imposing new burdens on an already threatened voluntary pension system—while perhaps politically appealing on the surface—will only hurt the workers that the legislation claims to protect.
Moreover, the proposal includes a cash balance provision that has nothing to do with resolving any of the issues arising from Enron. The proposal requires an employer who changes from a traditional pension plan to a cash balance plan (a form of a defined benefit plan) to provide an absolute choice between staying in the old plan or moving to the new plan, effectively locking in the existence of the old plan even for future benefits that are not vested. Cash balance plans are a reasonable response to changing demographics and economic circumstances, and if employers are not allowed flexibility to change plans (while, of course, not affecting vested benefits), many employers will choose not to provide any such benefits at all.
We strongly urge your opposition to the Miller Substitute. Even the true misfortunes surrounding Enron do not justify the limitations proposed by this amendment which will do more to threaten the availability of pension benefits for America's rank and file workers than to preserve them.
R. Bruce Josten
Executive Vice President, Government Affairs
U.S. Chamber of Commerce