Pension funding? The five year stop to Exec pay increases if they screw employees pensions was the FIRST and only idea put out by Congress to help the worker in this new "Bush" economy. But Broadcast media has said nothing! ???
http://www.globalaging.org/pension/us/private/2004/fairness.htm'Pension Fairness Act' Proposed to Freeze Some Executive Benefits
By Ellen E. Schultz, the Wall Street Journal October 8, 2004
Companies that dump their underfunded pensions during bankruptcy would be prohibited from paying special pensions to top executives for the following five years, under a bill introduced yesterday.
Sponsored by Rep. George Miller of California, the ranking Democrat on the Committee on Education and the Workforce, the bill comes in the wake of concerns that pension terminations at airline and steel companies will lead other financially troubled companies to foist their obligations onto the Pension Benefit Guaranty Corp., the quasi-public insurer that takes over failed pensions.
The bill, the Pension Fairness Act, also would freeze special pension payments to executives and directors for five years following a move to convert the traditional pensions for regular employees to "cash-balance" pensions. These types of pensions essentially freeze pension growth and instead provide the equivalent of a small annual pay-based contribution, which results in significantly lower pensions for many older workers.
While the bill has little chance of passage before Congress recesses before the election, it is among the first efforts by a lawmaker to link the fate of executive pensions to rank-and-file pensions.
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My "Actuarial" summary of the Act: The Pension Fairness Act of 2004 was introduced by George Miller (D-CA) so as to provide Fair Treatment between Executives and Rank and File Workers. It limits the ability of employers to cut the pension benefits of workers and retirees while continuing generous executive pensions and deferred compensation.
The Pension Fairness Act would protect workers and retirees in 2 situations. Corporations that reorganize under chapter 11 of the bankruptcy code and shift unfunded pension liabilities to the Pension Benefit Guaranty Corporation would be prohibited from promising or paying executive deferred compensation for directors and officers for a 5 year period. Corporations that amend their traditional pension plans and convert to cash balance plans reducing the pensions of older workers would be prohibited from promising or paying executive deferred compensation for directors and officers for a 5 year period.
The prohibition would begin on the date of any notice of intent to terminate or date of adoption of a cash balance amendment (with a one year look-back to prevent gaming by executives). The bill applies to all directors and executive officers as defined under the Sarbanes-Oxley corporate reform act. The bill applies to all executive deferred compensation agreements or arrangements, including excess benefit plans, top-hat plans, deferred bonuses, rabbi trusts, stock options, phantom stock, golden parachutes and pensions. Any deferred compensation paid or promised in violation of the Act is enforceable under ERISA (by DOL or participant civil actions) and is subject to an automatic 100% excise tax under the Internal Revenue Code
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http://edworkforce.house.gov/democrats/releases/rel10804b.htmlMiller Bill Would Stop Executive Retirement Compensation
for Five Years at Companies That Dump Under-Funded Pension Plans
Friday, October 8, 2004
WASHINGTON, DC -- The top Democrat on the House Education and Workforce Committee introduced legislation today to prohibit companies that dump their employees’ under-funded pension plans from also contributing to executive retirement plans.
Miller introduced the bill to create more of a level playing field in the corporate retirement world, where an increasing number of large companies are dumping their under-funded multi-billion dollar pension plans onto a taxpayer-backed agency, the PBGC, while simultaneously continuing to contribute toward their top executives’ retirement plans.
“This is about fairness,” Miller said. “There are too many examples of private companies taking care of their executives’ retirement compensation plans while they allow their employees’ hard-earned retirement plans to be ruined. <snip>
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