U.S. Chamber Hails Action on Pension Fix

WASHINGTON, D.C. – The United States Chamber of Commerce welcomed today's bipartisan Senate action on the 30-year Treasury bond rate fix and said that a new benchmark for pension contributions will prevent arbitrary plan contributions and protect workers' pensions.

"We are grateful that the Senate has passed legislation that will allow employers to calculate funding requirements using a conservative corporate bond rate instead of the artificially low, obsolete 30-year Treasury bond rate," said Bruce Josten, U.S. Chamber executive vice president for government affairs.

"Once enacted, this legislation will protect existing pension plans by establishing an appropriate funding level and help free up millions of dollars for capital investment, wage increases, and job creation," said Josten. "We hope that the Congress will quickly move this bill through conference so this important legislation can be moved to the President's desk as soon as possible."

Employers have been required to use 30-year Treasury bond rates to determine funding requirements designed to ensure that a plan has enough assets to fund future benefits. Once the Treasury stopped issuing 30-year bonds in 2001, this rate had become obsolete and artificially low, artificially inflating employer pension funding obligations.

A conservative corporate bond rate is a realistic reflection of actual plan contributions and therefore provides a stable and reliable measure of pension liabilities. A temporary fix to this problem was enacted by the Congress in March 2002 but expired in December 2003. The U.S. House of Representatives passed legislation on this issue (H.R. 3108) on October 8, 2003, by a vote of 397 to 2.

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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