[Congressional Record Volume 146, Number 46 (Wednesday, April 12, 2000)]
[Senate]
[Pages S2610-S2611]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       CASH BALANCE PENSION PLANS

  Mr. KENNEDY. Mr. President, I join Senators Jeffords, Harkin and 
Rockefeller in calling on the Senate to strengthen our Nation's pension 
laws. This amendment reaffirms the value of defined benefit pension 
plans for workers, and our commitment to protecting workers from age 
discrimination in the provision of pension benefits.
  Too many American workers have discovered that the pension promises 
made to them by their employers are virtually worthless. It is 
disturbing in this period of unprecedented economic prosperity and 
rising profits that major corporations are shortchanging their older 
and longer serving workers. These companies have changed the rules 
unfairly, by converting traditional defined benefit pension plans to 
so-called ``cash balance'' plans.
  Companies have made these conversions quietly, without informing 
workers of the impact of the changes on their retirement security. When 
workers ask for an explanation, all too often they are given devious 
responses. Some employers have done the right thing and allowed older 
and longer service workers to remain covered under the original plan, 
but other employers have not.
  In addition, many cash balance plans deny benefits to older workers 
for a period of time after the conversion, using

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a discriminatory practice known as ``wear away.'' This practice 
prevents older and longer service workers from earning new benefits 
under the cash-balance plan until that benefit exceeds the original 
promised benefit. We must end the practice of wear away immediately.
  Our amendment calls on Congress to enact legislation this year 
requiring, at a minimum, that employers provide workers with adequate 
notice of a change in their pension plan that reduces future benefits. 
It also prohibits the discriminatory practice of wear away. Our 
amendment makes clear that Congress will take whatever action is 
necessary to assure older workers that they will not be short-changed 
when it comes to their retirement security. It is long past time for 
Congress to act and protect our older and longer service workers. We 
value older workers in America--we don't ``wear them away.''

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