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OPA News Release: [06/09/2005]
Contact Name: David James or Gloria Della
Phone Number: 202-693-4676 or x8664
Release Number: 05-1043-NAT

U.S. Labor Secretary Elaine L. Chao Applauds Chairman Boehner for Introducing Pension Reform Legislation

Bush Plan to Strengthen Retirement Security is Top Priority

WASHINGTON — U.S. Secretary of Labor and Chairman of the Board of the Pension Benefit Guaranty Corp. (PBGC) Elaine L. Chao today praised Chairman John A. Boehner for his leadership of the Committee on Education and the Workforce in acting quickly to propose legislation to reform the nation's pension systems.

“I applaud Chairman Boehner for his leadership on this crucial issue and his recognition that fundamental reform is necessary,” said Secretary Chao. “In January, the President proposed comprehensive pension reform to ensure that retirement promises made to American workers and retirees are kept, and Chairman Boehner's bill builds on this foundation.

“We look forward to working with Chairman Boehner and his colleagues in the House and Senate to implement our strong reforms. Any reform package must ensure that pension obligations are measured and reported accurately; smoothing of assets and liabilities, and the use of phantom credit balances, are inappropriate. If nothing is done, the pension security of 34 million workers and retirees will be more at risk and the financial integrity of the federal insurance system will be compromised.”

In January 2005, Secretary Chao unveiled the Administration's plan to ensure the long-term solvency of the PBGC and protect the workers and retirees covered by private, single-employer defined benefit plans. It is based on three main principles:

• reforming the funding rules for private defined benefit pension plans to ensure that employers accurately measure and fully fund their retirement promises;
• requiring more timely and useful disclosure of pension plan information to workers, investors and regulators to ensure greater transparency and accountability, and
• reforming the premiums that private defined benefit plans pay to the federal insurance program to better reflect the real risks and costs.

A fact sheet about the Administration's plan for strengthening retirement security can be found at www.dol.gov/opa/media/press/opa/retirementsecurityfactsheet.htm. For additional information about pension reform, visit the department's dedicated Web page at www.dol.gov/ebsa.