U.S. Chamber Urges Final Action on Pension Fix

WASHINGTON, D.C. – The United States Chamber of Commerce welcomed today's House vote on the pension conference report, which replaces the obsolete 30-year Treasury bond rate with a new benchmark for corporate contributions, and urged the Senate to quickly follow suit and send the legislation to President Bush for signature.

"Swift action by the Congress and President Bush will prevent unnecessary plan contributions and protect workers' pensions," said Bruce Josten, Chamber executive vice president.

"Dedicating available corporate funds to the economic recovery underway, instead of excess pension contributions, is a win-win for workers and the economy."

The Pension Benefit Guarantee Corporation estimated companies were facing $80 billion in inflated pension contributions over the next two years, because those contributions were based on an obsolete benchmark system.

"This is capital that can now be used for investment, wage increases, job creation or other business enhancements," according to a Chamber letter to members of the U.S. House. The Chamber letter identified votes on the Pension Funding Equity Act (H.R. 3108) to be "key votes" that may be included in the Chamber's annual rankings.

Previously, corporate pension contributions were calculated using the 30-year federal Treasury bill rate. When the 30-year T-bill was discontinued, Congress enacted a temporary fix that expired in December 2003. The uncertainty surrounding this issue has already had an adverse impact on the pension system. Two separate consulting firms have found that
20–39% of employers either have frozen or are planning to freeze their plans, absent a fix.

"Employers voluntarily provide tens of millions of American workers with pension benefits," said Josten. "We are pleased that lawmakers have recognized the need to act."

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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