The Association of U S West Retirees



Pension bill should be Senate priority
Full consideration should be given to a measure that would protect the retirement funds of 106 million working Americans and their families.
Denver Post Editorial
Wednesday, August 2, 2006

With the financial security of 106 million working Americans and their families at stake, the U.S. Senate is trying to pass a major pension reform bill before breaking for recess Friday.  Unfortunately, senators are being muzzled by GOP leaders who are forbidding any amendments to a flawed House-passed measure.

The issue strikes close to home because the 2003 bankruptcy of United Airlines ended defined-benefit pensions for the carrier's 55,000 employees, including 5,000 in Denver.  The cost of picking up United's pensions along with those of other bankrupt companies then threatened the solvency of the Pension Benefit Guaranty Corp., the agency that insures defined benefit pensions for 44 million workers.  The PBGC reported a $22.8 billion deficit this year.

As passed by the House, the Pension Protection Act of 2006 would strengthen the PBGC and force U.S. companies that have underfunded their pension plans to bring them to solvency. Companies underfunded their plans last year by $450 billion, according to the U. S. Labor Department.

The House also contains good provisions to encourage "automatic" 401(k) plans that automatically enroll employees unless they specifically opt out.  The bill also would make the Savers Credit permanent and index it to inflation.  That tax credit rewards 401(k) and IRA savings by moderate- and lower-income workers and is used by more than 5 million tax filers each year.

Alas, the House measure also contains an unfair provision that gives some airlines, including Delta and Northwest, 17 years to pay underfunded pension obligations.  American and Continental, which would have to bring their pension funds to full funding in just 10 years, have protested that double-standard puts them at a competitive advantage.

Senate Majority Leader Bill Frist wants a vote on the pension bill by the end of the week -- prior to a five-week summer recess -- and some supporters say the Senate could deal with the disparity in airline pensions and other problems in a separate bill after they return.

To the contrary, the bill is one of the most important to come before Congress this year, and it should have the Senate's full attention.  It's unfair to force a vote without allowing for amendments.

Frist earlier attempted to tack an estate tax cut for multi-millionaires into the Senate pension bill, before conspiring with House leaders to add the tax items to the minimum wage bill that lurched through the House last week.  He seems unable to proceed in a straightforward manner.

Pension reform is too vital to be a mere ornament in a special-interest Christmas tree.  The Senate should give full consideration to Pension Protection legislation and resolve any differences with the House.