[Congressional Record Volume 151, Number 164 (Sunday, December 18, 2005)]
[Extensions of Remarks]
[Page E2610]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     PENSION PROTECTION ACT OF 2005

                                 ______
                                 

                               speech of

                           HON. DENNIS MOORE

                               of kansas

                    in the house of representatives

                      Thursday, December 15, 2005

  Mr. MOORE of Kansas. Mr. Speaker, I rise today to express my support 
for H.R. 2830, the Pension Protection Act of 2005.
  As the nature of our economy has changed in recent decades, our 
manufacturing sector has experienced difficult times. Many companies in 
the auto, auto parts, and steel producing industries are now burdened 
with expensive legacy costs, particularly pension obligations, that are 
increasingly difficult to honor. Long-term costs have contributed to 
the need for companies in these industries to seek significant cost 
savings, sometimes through factory closings and employee layoffs. 
Consequently, defined benefit pension plans sponsored by some of the 
companies in these industries, as well as in the airline industry, in 
which several companies have sought Chapter 11 bankruptcy protection in 
recent years, have been turned over to the Pension Benefit Guaranty 
Corporation [PBGC].
  This legislation, while not perfect, seeks to increase private 
companies' funding of their employees' pension plans, as well as 
improve the financial health of the PBGC by increasing companies' 
premiums to the agency. The risk of a taxpayer-funded bailout of the 
PBGC, which is funded entirely by companies' that sponsor defined 
benefit pension plans, is very real in the near future. According to 
Bradley Belt, the Executive Director of the PBGC, ``Unfortunately, the 
financial health of the PBGC is not improving. The money available to 
pay benefits is eventually going to run out unless Congress enacts 
comprehensive pension reform to get plans better funded and provide the 
insurance program with additional resources.'' Congress has a 
responsibility to act now to prevent a PBGC bankruptcy and future 
taxpayer bailout of the agency.
  Last year, the PBGC absorbed 120 terminated defined benefit pension 
plans, and last month the agency announced that in fiscal year [FY] 
2005 it had liabilities of $79.2 billion and assets of $56.5 billion. 
That amounts to a deficit in the pension insurance program of $22.8 
billion. While the FY05 deficit improved slightly over FY04's deficit 
of $23.3 billion, the latest deficit figure from the PBGC is somewhat 
misleading. The agency's FY05 deficit actually would have increased to 
$25.7 if it had included company-plan terminations announced after the 
fiscal year ended on September 30. Probable pension losses from 
companies that filed for Chapter 11 protection in September, including 
2 large airlines and a major auto-parts supplier, will likely increase 
the PBGC's liabilities. The PBGC estimates that the pension plans in 
those companies are underfunded by more than $15 billion. The agency 
includes those pension plans in its category of financially weak 
company plans, the liabilities of which rose to $108 billion this year 
from $96 billion in 2004.

  In 2004, the PBGC collected only $1.5 billion in premiums from the 
companies that it insures. H.R. 2830 would raise companies' annual PBGC 
premium payments from $19 to $30 per participant. The $30 premium would 
be phased in beginning in 2007, on a schedule based on a plan's funded 
status. Even with premium increases in H.R. 2830, it could take more 
than a decade to close the agency's deficit. I hope that this bill is 
the beginning of the PBGC's long march back to fiscal health.
  Further, H.R. 2830 would increase companies' funding requirements for 
their defined benefit plans and would shorten the period over which 
funding shortfalls must be eliminated. The bill's provisions regarding 
both single- and multi-employer plans move companies in the right 
direction.
  I also appreciate the willingness of Chairmen John Boehner and Bill 
Thomas to agree to a significant improvement in the ``shutdown 
benefits'' provision of H.R. 2830 as introduced. Shutdown benefits, 
which are payments made to long-service employees when a plant is shut 
down, would have been prohibited under the original version of H.R. 
2830. The improved version of this measure allows a defined benefit 
plan to provide shutdown benefits if the plan is at least 80 percent 
funded. Well-funded pension plans will be able to continue providing 
shutdown benefits to employees who have worked hard over their careers 
and expect the retirement benefits that they have been promised. H.R. 
2830 will soften the blow of expected plant shutdowns at companies that 
have fulfilled their responsibilities to their employees and funded 
their pension plans as they were supposed to over the years.
  Finally, I am very supportive of the provisions in H.R. 2830 that 
would make permanent several retirement savings provisions that were 
included in the 2001 tax law, including the increases in IRA and 401(k) 
contribution limits, with their full adjustments for inflation. Prior 
to 2001, the maximum amount that a taxpayer could contribute to an IRA 
was $2,000 per year. The 2001 tax law gradually increased that limit to 
$5,000 [by 2008]. I worked to ensure that IRA contribution limits 
increased in that law, and believe that the permanent extension of 
those limits will increase the certainty needed in retirement planning. 
Likewise, I strongly support the bill's language that would make 
permanent the saver's credit for low-income taxpayers. Taxpayers with 
incomes below $50,000 for a married couple, and below $25,000 for 
individuals, are eligible to receive a tax credit of up to 50% of 
contributions [up to $2,000] that they have made during the year to 
employer-sponsored retirement plans or IRAs. Increasing incentives for 
people of all income brackets to save for their retirements should be a 
top priority of Congress, and I will continue to work with my 
colleagues in both parties to improve the national savings rate in our 
country.




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