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OPA News Release: [03/02/2005]
Contact Name: Eryn Witcher or Gloria Della
Phone Number: 202-693-4676
Release Number: 05-0353-NAT

Labor Department Testifies Before House Education and the Workforce Committee on Administration’s Pension Reform Proposal

WASHINGTON—Assistant Secretary of Labor Ann L. Combs today testified before the House Committee on Education and the Workforce to discuss the Bush Administration's pension reform proposal to strengthen the retirement security of private, single employer defined benefit pension plans. Combs' testimony focused on changing the funding rules to ensure that retirement plans are adequately funded, increasing disclosure of information to workers about their plans, and improving the structure of the pension insurance system.

“The defined benefit system needs comprehensive reform, and mere tinkering with the current rules will not fix the problems,” said Combs. “The Administration's reform package will improve pension security for workers and retirees, stabilize the defined benefit system, and avoid the need for a taxpayer bailout.”

In her testimony, Combs discussed key elements of the Administration's plan, including:

• a single, accurate way to measure pension fund liabilities, replacing an existing system that is overly complex, confusing and ineffective;
• flexibility for solvent companies to make more generous contributions to pension plans during good economic times;
• restrictions on the ability of financially strapped companies to promise more benefits than they can pay for;
• measures to ensure the long-term solvency of the Pension Benefit Guaranty Corporation.

In conclusion, Combs said “We look forward to working with members of this committee to achieve greater retirement security for the millions of Americans who depend on defined benefit plans.”

The full text of today's testimony is available on the Labor Department's Web site at www.dol.gov/ebsa under Administration's Pension Reform Proposal.

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