Release Date: Dec 11, 2003Contact: 888-249-NEWS
U.S. Chamber Urges Pension Fix Priority--Early Action Means Huge Savings
WASHINGTON, D.C. – The United States Chamber of Commerce expressed its severe disappointment with the lack of action on the 30-year Treasury bond rate fix and called on Senate lawmakers to make addressing a growing pension problem their first order of business after the Senate returns on January 20.
Without a new corporate bond rate to replace the 30-year Treasury bill as a benchmark for pension contributions, companies will have to commit significant resources for plan contributions, thus jeopardizing jobs and economic growth.
"The surest way to kill economic growth is by pulling cash out of the recovery unnecessarily," said Randel Johnson, Chamber vice president of labor, immigration and employee benefits.
"Without swift action in January, companies will be required to make more than $26 billion in pension contributions over the next two years."
Even with retroactive relief, as promised by the Senate, many companies will still be forced to set aside millions of dollars in inflated pension contributions before economic growth is firmly established, according to the Chamber. Congress' failure to resolve this issue before departing threatens the ability of companies to plan for future pension contributions with any certainty, and will be one more factor driving employers away from the defined benefit pension system.
U.S. employers voluntarily provide tens of millions of American workers with pension benefits. The high cost of delay could add up to fewer pensions or – in the worst case – threaten the economic health of struggling companies.
"Senate lawmakers must make this their first order of business," said Johnson. "We will make this message clear to members of Congress during the recess."
The U.S. Chamber of Commerce is the world's largest business federation representing more than three million businesses and organizations of every size, sector and region.
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