The Pension Protection Act of 2005

THE PENSION PROTECTION ACT OF 2005 -- (Extensions of Remarks - January 31, 2006)

SPEECH OF
HON. ROSA L. DeLAURO
OF CONNECTICUT
IN THE HOUSE OF REPRESENTATIVES
TUESDAY, JANUARY 31, 2006

* Ms. DELAURO. Mr. Speaker, pension plans are today underfunded in this country by $450 billion--up over 1,000 percent since 2000--and the agency that insures these pension plans, the Pension Benefit Guaranty Corporation, is $23 billion in debt, facing billions more in possible claims from companies such as Delta Airlines, Delphi, and Northwest Airlines.

* Why? Well, my colleagues on the other side of the aisle give the same excuse every time: September 11. We are at war. Times are tough. But during that same time, corporate profits have risen an astonishing 50 percent and CEO compensation has grown even faster. Indeed, USA Today reports that 300 executives responsible for more than three-quarters of a trillion dollars in corporate losses since 2000 were rewarded with salary, bonuses and stock options totaling a staggering $12 billion--$8 million per year.

* Times are not so tough for them--and little wonder. As a confidential letter sent to the SEC shows, CEO compensation at many publicly traded companies bears no relation to company performance. But as we all know, pensions do.

* And when we talk about pensions and why reform is so badly needed, we should remember who it is that depend on them most--we are talking about people who have worked all their lives and are looking to enjoy their later years with some measure of financial security. Most of the 34 million Americans who are covered by a traditional pension that provides a guaranteed monthly benefit in retirement are not young adults starting out, with their whole careers in front of them--people who can change course at a moment's notice. These are very often seniors, people who have raised families; again, people who have worked their entire lives and paid not only their taxes but their dues to society with the expectation that what they have invested will be returned to them. The least we can do as their elected representatives is tell them that we will ensure that the Government does its part to guarantee that their employers will honor their end of this bargain.

* That should be the bedrock principle on which this legislation is predicated, but it is not. H.R. 2830 fails to protect older and longer-service workers that are involved in cash balance pension plan conversions. It does not prevent employers from giving the same conflicted financial advice to their workers that gave us Enron and WorldCom. And perhaps most disturbingly, it fails to stop companies from dumping billions of dollars of unfunded pension obligations onto the PBGC by declaring bankruptcy at the expense of taxpayers and employees.

* And let's be clear, that is very much by design. The goal of this Republican majority from the beginning with pension reform these last few years has been the same--relieving companies from their obligations to employees, providing an out to the point where we would have no choice but to switch from a strong pension system to one that leaves retirees in a much more tentative, less secure financial state. And with Republicans in charge these last 4 years, we have almost reached that point--but not quite yet.

* But this is not the direction we want to take as a country. And so, I urge my colleagues to make a statement with this vote that says companies do have obligations their workers--that says reforming our pension system is possible but only if we ask employees and employers alike to share in the benefits and the sacrifice. We can do better than this bill and I urge my colleagues to oppose it.

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