[Congressional Record Volume 151, Number 60 (Tuesday, May 10, 2005)]
[Extensions of Remarks]
[Pages E923-E924]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              THE PENSION FAIRNESS AND FULL DISCLOSURE ACT

                                 ______
                                 

                           HON. GEORGE MILLER

                             of california

                    in the house of representatives

                         Tuesday, May 10, 2005

  Mr. GEORGE MILLER of California. Mr. Speaker, I rise today to 
introduce ``The Pension Fairness and Full Disclosure Act,'' legislation 
to end the gross discrepancies between the way the retirement packages 
of a company's rank and file employees and top-executives are treated.
  Executive compensation packages often provide lavish golden 
parachutes that are hidden from employees, shareholders, and 
regulators. Employees are told the company has little choice but to cut 
their pay and benefits, while being kept in the dark about the fortunes 
that companies shower on executives who have presided over the 
company's failure.
  In fact, extensive executive packages are often increased at the very 
same time their employees' pensions are cut. As employees are asked to 
give back benefits they have

[[Page E924]]

earned, executives are often padding their own retirement packages. The 
executives who make the critical decisions to save or scrap employee 
pension plan rarely share the pain of their decisions--but are 
perversely rewarded for cutting company liabilities to their workers.
  My legislation brings greater equity to the private pension system by 
requiring full disclosure of executive compensation packages to 
employees, and by linking the benefits in executive compensation plans 
to those of the rank-and-file for whom these executives bear 
responsibility.
  A 2003 Executive Excess report by United for a Fair Economy found 
that the median pay for executives at the 30 companies with the most 
underfunded pension plans in 2002 was $5.9 million, or 59 percent 
higher than the median pay for executives at the typical large company. 
These 30 companies had a combined $131 billion pension deficit in 2002, 
but paid their executives a combined $352 million.
  While the underfunding threatened employee pensions, 19 of these 
executives saw their pay rise, and 10 saw their pay more than double in 
2002. The executive pensions themselves are exorbitant. A review of 
2004 proxy statements from 500 large companies by Corporate Library for 
the New York Times revealed that 113 chief executives could expect 
retirement benefits of more than $1 million per year. At least 31 would 
see $2 million or more per year. A list of some of the more recent and 
well-publicized outrages on how executive plans and rank-and-file plans 
are treated is attached to this letter.
  ``The Pension Fairness and Full Disclosure Act'' makes overdue 
changes in pension law to end these grotesque disparities in the way 
the retirement security of employees and executives are treated.
  Corporations that file for Chapter 11 bankruptcy and shift unfunded 
pension liabilities to the Pension Benefit Guaranty Corporation (PBGC), 
or convert their traditional pension plans to cash balance plans in a 
way that does not protect older workers, would not be permitted to 
increase executive deferred compensation for directors and officers for 
a 5-year period without incurring a 100 percent excise tax.
  Corporations with underfunded rank-and-file pension plans would be 
prohibited from providing any funding for executive pension plans 
unless and until their rank-and-file plans are at least 75% funded.
  Corporations would have to disclose the full value of their executive 
compensation plans when they move to terminate the plans in bankruptcy 
or make amendments to the plan to freeze benefits or reduce future 
accruals.
  For far too long, some companies have irresponsibly rewarded their 
executives while unfairly cutting or eliminating their employees' 
pensions. I invite my colleagues to join me in supporting and passing 
``The Pension Fairness and Full Disclosure Act.''

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