[Congressional Record Volume 152, Number 43 (Thursday, April 6, 2006)]
[House]
[Pages H1615-H1621]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
MOTION TO INSTRUCT CONFEREES ON H.R. 2830, PENSION PROTECTION ACT OF
2005
Mr. GEORGE MILLER of California. Mr. Speaker, I offer a motion to
instruct.
The SPEAKER pro tempore. The Clerk will report the motion.
The Clerk read as follows:
Mr. George Miller of California moves that the managers on
the part of the House at the conference on the disagreeing
votes of the two Houses on the Senate amendment to the bill
H.R. 2830 be instructed to agree to the provisions contained
in the Senate amendment regarding the prohibition of wearaway
in connection with conversions to cash balance plans and the
establishment of procedures affecting participants' benefits
in connection with the conversion to such plans and not to
agree to the provisions contained in title VII of the bill as
passed the House.
The SPEAKER pro tempore. Pursuant to clause 7 of rule XXII, the
gentleman from California (Mr. George Miller) and the gentleman from
California (Mr. McKeon) each will control 30 minutes.
The Chair recognizes the gentleman from California (Mr. George
Miller).
Mr. GEORGE MILLER of California. Mr. Speaker, I yield myself 7
minutes.
Mr. Speaker, I offer a motion to instruct conferees on H.R. 2830, the
Pension Protection Act. The Senate appointed conferees on March 3 and
the House on March 8, and yet 1 month later it appears almost no
progress has been made. In fact, I actually would say that the
conference seems to have gone backwards. Senator Enzi, the conference
chair, promised that there would be an open and bipartisan conference;
Mr. Leader Boehner promised the same. Instead, both meetings have been
held in secret by a small group of Republican conferees.
There are a lot of important issues pending in the pension
conference. Every day employers are dumping their pension plans and
millions of workers are deeply worried about their retirement security
and whether or not they will have sufficient funds for their retirement
to support their families. One of the key issues pending in the
conference is whether or not older workers will be protected when
employers convert their traditional defined benefit plans to a so-
called cash balance plan. It is a critical issue for millions of
American workers, and it is not a new issue to this House.
During the 1990s, hundreds of large employers switched to these cash
balance plans, including IBM, whose conversion was ruled illegal. As
many as 8 million workers have been affected by these conversions, many
of them, perhaps half of them, experienced deep cuts in their pension
benefits as a result of these conversions.
Let's be clear. Companies promised these benefits to these workers.
These workers earned these benefits. Then with some paperwork and a
little fancy accounting footwork, companies slashed the benefits of
these workers. How did the companies do it? First, the benefits of the
traditional pension plan are based upon the worker's pay at the end of
their careers and when they are earning the most. Cash balance plans,
on the other hand, are based on worker's average pay over the course of
their career.
With just a simple change on how benefits are calculated, companies
can devastate the retirement nest eggs of hard-working employees,
workers who gave up wages, who gave up vacation days, who gave up all
kinds of benefits as they balanced out their pension plans. Yet we now
see companies unilaterally essentially destroying the pension benefits
that those workers are entitled to.
Older workers under these conversions can lose up to half, half of
their expected retirement benefits. Don't take my word for it. That is
according to the Government Accountability Office. They tell us that
that is what happens to older workers. This chart shows exactly what
happens. This is what would happen to the workers who went into the
workforce at age 25 and worked for a company. They would see their
traditional retirement benefits continue to go up. With a cash balance
plan, the retirement benefits go down.
For the older workers, this is what they stand to lose. For anyone
over about the age of 46, 47 years old, they have a substantial change
in the pension benefit that they were counting on. Obviously, for these
workers out here, at age 55, it is very difficult, if not impossible,
to see how they would recover a sufficient amount of savings to provide
for the retirement that they were planning on at that time.
And it gets worse if you are 60 years old. So anybody after 45 years
of age is greatly disadvantaged under these plans. And that is what is
going on in the pension conference committee, is whether or not we will
have the opportunity to provide for those older workers.
What we now see is that IBM did this and the court stopped those
conversions in 1999. The House voted overwhelmingly on several
occasions in support of amendments urging the protection of older
workers. The Bush administration first tried to lift the moratorium and
legalize these conversions. But after 218 Members of the House or the
Congress urged the President to reconsider, he withdrew that proposal.
The Bush administration changed its position and has submitted
proposals that do more to help the older workers.
As part of the pension funding reform legislative debate, Senators
Baucus, Kennedy, Frist, Grassley, Hatch and Lott brokered a compromise.
The compromise largely follows the Bush administration proposal and was
passed by the Senate 97-2. This motion to instruct that I am offering
today urges the conferees to support the Senate compromise on
protecting older workers in the cash balance conversion.
The House-passed bill contains no protection for older workers and
would actually legalize some of the worst employer practices that
jeopardizes worker retirement security and their retirement nest eggs.
The AARP, the AFL-CIO, the National Committee to Preserve Social
Security and Medicare, the National Legislative Retirees Network, and
the Pension Rights Center all support this motion. The AARP opposes any
pension funding reform bill that does not protect older workers
affected by these cash balance conversions.
The House of Representatives has already voted three times to require
the Treasury Department to protect older workers from age
discrimination in cash balance conversions. In 2002, the amendment
passed by a vote of 308-121; in 2003, it passed 258-160; and in 2004,
it passed 237-162. Mr. Speaker, obviously this House has recognized the
unfairness of the cash balance plans to older workers and that older
workers ought to be protected.
We believe that older workers ought to be given a choice. That is
what the Congress did when it changed its pension plan. That is what
Secretary of Commerce Snow said that he did when he was running his
company, when he sat on the board of other companies, because he said
that was the fair thing to do. The Bush administration has come around
to that position. The only place where we don't hold that position is
under the Republican-passed bill on the pensions that is now in the
conference committee.
That is why this motion to instruct is important, so that we can make
sure that, at a minimum, we can exit that conference committee with the
Senate-passed provisions that passed 97-2 to help protect, not perfect,
but to help protect older workers who are subject to these dramatic
changes by their employers, and who have very little opportunity to
recover that nest egg of retirement benefits that they were counting
on, that they worked hard to earn, that they negotiated with their
employers and now simply, by a unilateral action, are ripped away from
them.
It is not fair, it is not ethical, it is not right, and this Congress
ought to
[[Page H1616]]
stand up and change it to protect those older workers. I urge my
colleagues to support the motion to instruct.
Mr. Speaker, I reserve the balance of my time.
Mr. McKEON. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, hybrid pension plans represent an important component of
worker retirement security. In fact, more than 9 million workers today
rely on these benefits for a safe retirement. Unfortunately, some
continue to paint a misleading picture about these pension plans.
Despite these claims, hybrid plans actually provide more generous
benefits for the majority of workers than do traditional plans.
{time} 1745
These conclusions emerge from a growing body of independent research
by economists and academics at some of the Nation's most respected
institutions, including the Federal Reserve Board, the Urban Institute,
the Brookings Institution, and the Wharton School of Business.
Not only are hybrid plans especially advantageous for women and
lower-paid workers, but they also comprise the only part of the defined
benefit system that is growing. Hybrid plans now provide the PBGC with
approximately 25 percent of its premium income. And because the total
number of defined benefit plans has declined significantly over the
last 20 years, it is now more important than ever to encourage
employers to stay in the defined benefit system and offer these
benefits.
The threat of liability is creating ongoing legal uncertainty and
undermining the retirement security of American workers, however. A few
conversions from traditional plans to hybrid plans have raised policy
questions about whether such conversions are age discriminatory. But
notably, the vast majority of conversions have been handled properly
within the rule of law and to benefit the workers.
In a typical hybrid plan, a participant's account is credited each
year with pay and interest credits. Hybrid opponents have argued that
benefits for younger workers are ultimately higher than benefits
provided to older workers because younger workers accrue interest and
earn benefits over a longer period of time. This is tantamount to
arguing that the concept of compounding interest is age discriminatory,
which would make the most basic savings account illegal. In short, the
argument holds no water.
Recent court decisions made clear that no age discrimination occurs
with these plans if the pay and interest credits attributed to older
employee accounts are equal to or greater than those of younger
workers. And the majority of courts have ruled that hybrid and other
hybrid plans are not age discriminatory.
Moreover, under the Employee Retirement Income Security Act and the
Internal Revenue Code, benefits earned under a traditional plan cannot
be reduced when they are converted to a hybrid plan. That is right, in
spite of assertions to the contrary, vested benefits earned by workers
are never reduced in a hybrid conversion.
The Pension Protection Act which was approved by a bipartisan
majority in the House last December helps resolve the legal uncertainty
surrounding hybrid plans and ensures they remain a viable part of the
defined benefit system. The measure establishes a simple age
discrimination standard for all defined benefit plans that clarifies
current law with respect to age discrimination requirements on a
prospective basis. And it prohibits the reduction of any vested
benefits workers have earned during a conversion to a hybrid plan.
Mr. Speaker, our ultimate goal is to ensure hybrid plans remain a
viable option for employers who want to remain in the defined benefit
system and workers who prefer the portable and secure benefit this
option provides. The Pension Protection Act provides a balanced
approach that protects the benefits workers have earned and provides
the legal certainty needed to encourage employers to continue offering
these benefits.
This Democrat motion to instruct would place harsh mandates on those
who voluntarily offer these pension benefits, which is particularly
harmful at a time when so many are leaving the defined benefit system
altogether. I urge my colleagues to vote ``no'' on the motion to
instruct and reject this attempt to obscure progress on pension reform.
Mr. Speaker, I reserve the balance of my time.
Mr. GEORGE MILLER of California. Mr. Speaker, I yield myself 1
minute.
I want to make clear I think the gentleman misunderstands the nature
of the motion. This is not about whether you have hybrid plans or cash
balance plans. We made that very clear. We simply want those plans to
protect the older workers that stand to lose a great deal of benefits.
For younger workers there is some suggestion these plans may be
better. It is interesting that 40 percent of the workers in these plans
never get to a benefit even under this. But at a minimum, it ought to
be clear that older workers are not going to suffer irreparable
economic harm in terms of their retirement.
Mr. Speaker, I yield 3 minutes to the gentleman from New Jersey (Mr.
Andrews).
Mr. ANDREWS. Mr. Speaker, I thank my friend and ranking member for
yielding.
I appreciate the comment he just made, but the debate here really is
not about whether the law should authorize hybrid plans or cash balance
plans. The issue is how should the law authorize those plans and what
kinds of protections should be included for pensioners and workers.
I think Mr. Miller's approach in this motion to instruct takes us
down the right road, and I would urge my colleagues to vote ``yes'' and
support it.
There are three issues that we have to resolve here. The first is
what steps should be taken to prevent the wearing away of benefits for
workers that have started in a pension plan and then find themselves in
a different position because of a hybrid plan being adopted.
Mr. Miller's approach I think uses the most conservative assumptions
and therefore the fairest assumptions for those workers to make sure
that they will not lose benefits.
The second question that has to be addressed is what are the
conditions under which a conversion will be treated as legal. In other
words, if an employer has a traditional pension plan today and he or
she wants to switch that plan to a hybrid plan, what are the ground
rules for a fair conversion. I think Mr. Miller's approach is the fair
and just one in that regard as well.
The third question which is raised in neither bill, but which I hope
the conference could at least touch on, is what about conversions that
have already taken place, and what should the ground rules be for those
with respect to any lingering issues that may have happened with
respect to them.
Chairman McKeon I think is right, there does need to be a recognition
of the proper place of hybrid plans in the defined benefit world. I
think the House and Senate agree that is the case.
The issue, though, as Mr. Miller raises, is what are the proper rules
to ensure fairness in those hybrid plans. I think Mr. Miller takes the
proper approach, and so I urge a ``yes'' vote on this motion to
instruct.
Mr. McKEON. Mr. Speaker, I yield such time as he may consume to the
gentleman from Minnesota (Mr. Kline), a member of the committee.
Mr. KLINE. Mr. Speaker, I thank the gentleman for yielding me this
time.
Mr. Speaker, in all of the days and weeks and months that we in the
committee were debating the state of pensions, defined benefit
pensions, it was clear to all of us that we are losing more and more of
those plans. More and more employers are going out of business, going
into bankruptcy, terminating their plans or simply not starting them.
As has been pointed out, we passed in the House, and I think the
gentleman from California called it a Republican, but I think it was a
bipartisan bill with 70 Democrats joining us in that vote, including
provisions for these hybrid and cash balance plans.
My fear is that as we put more and more mandates on employers, we
will lose more and more plans. Without some legal certainty from
Congress, employers will stop offering these benefits, and cash balance
plans will simply fall by the wayside like so many other pension
options.
This Democrat motion and the Senate bill mandate particular pension
[[Page H1617]]
benefits which could have a devastating effect of accelerating the
demise of the defined benefit pension system, and I do not think any of
us want that.
Consider that in 1986 there were 172,642, that is, 172,642 defined
pension plans, and that number dropped to 29,000 in recent years. That
is the wrong direction.
Greater mandates on employers will only increase this trend. Mandates
would create enormous problems for employers. For example, a mandate
would determine pension designs instead of allowing employers to decide
what is proper for individual businesses, and that would result in more
plan freezes and terminations if employers are denied the flexibility
to adapt their plans to business circumstances and employee needs.
Again, we are faced with the specter of more and more plans going
away. Employers should be encouraged to offer pension plans, and the
government should not mandate the vehicle by which to offer such
benefits to their employees. Mandating a particular type of conversion
would be harmful to workers. More workers receive higher benefits from
their cash balance plan than benefits earned under the traditional
defined benefit plan.
In any case, we want a solid pension plan and more businesses for
more workers, and my concern is that this motion to instruct in the
Senate provision would work the other way. Let's not drive out more
pension plans. I urge my colleagues to reject this motion to instruct.
Mr. GEORGE MILLER of California. Mr. Speaker, I yield myself 30
seconds.
I would just say that this is about whether or not we continue in the
direction that the Republican pension bill takes us where the Pension
Benefit Guaranty Corporation said the bill made the system less secure,
where the Congressional Budget Office said it made the system less
secure, and now what we do not have are the protections on cash balance
plans which make it less secure.
If we keep going in that direction, if we keep following the
Republicans, America's retirement benefits will be less and less
secure. Their retirement will be in greater and greater jeopardy. We
can change the direction. We can go in another direction. The Senate
voted 97-2 to provide these kinds of protections. This is not some
crazy partisan idea. This was a big bipartisan bill with Senator Lott
and others on this bill, and it is about protecting people's pensions.
Mr. Speaker, I yield 4 minutes to the gentleman from Vermont (Mr.
Sanders) who has been working this issue longer than anyone else in the
House.
Mr. SANDERS. Mr. Speaker, the middle class of this country is being
assaulted in so many ways. Millions of Americans are working longer
hours for low wages. In the last 5 years, 6 million Americans have lost
their health care. We have lost 2.8 million good-paying manufacturing
jobs. New jobs being created are low wage and low benefits.
But of all of the attacks taking place on the middle class, I think
the most unspeakable is the assault by corporate America against the
pensions that were promised to American workers. Just think about it.
There are millions of people today who have worked for a company for 20
or 30 years, and one of the reasons they worked for that company is
that they were promised that when they retire, they are going to have a
certain pension. And then suddenly out of nowhere a company says thank
you for working for us for 30 years, thank you for not going to another
company when you had a better opportunity, but we have changed our mind
and we are going to cut your pension by 20, 30, 50 percent. It is too
bad you are 60 years of age and you have no place else to go, that is
the reality. That is unspeakable, it is unacceptable. When those
workers have no place else to turn to, it is the job of the United
States Congress to stand up for them.
Mr. Speaker, I rise today in strong support of the Miller motion to
instruct, and I commend the gentleman from California for his
leadership on this issue.
Mr. Speaker, pension anxiety is sweeping this country. Millions of
Americans are worried that the pensions they have today will not be
there for them when they retire, and with good reason.
Over the past two decades, large corporations have been breaking the
retirement promises they made to their employees, and that is wrong.
Some companies are declaring bankruptcy for the sole purpose of
breaking those retirement commitments. Other companies are freezing
pension plans in order to slash retirement benefits of older workers.
Congress must tell corporate America in no uncertain terms that when
they make a promise to workers about their pensions, they must keep
that promise. That is what Mr. Miller's motion is all about.
Mr. Speaker, last December the House passed a so-called pension
reform bill that was hundreds of pages long. Included in that bill was
an obscure provision to legalize age discrimination in cash balance
plans prospectively. No floor amendments were allowed to strike this
provision or offer any alternatives to it. Members were forced to vote
up or down on the entire bill, but the Senate did the right thing. In
their bill they provided important protections for older workers who
would be negatively impacted by cash balance schemes. The Senate
language is supported by the AARP, the AFL-CIO, the National Committee
to Preserve Social Security and Medicare, the National Legislative
Retirees Network, and the Pension Rights Center.
Today, unlike last December, we have an opportunity to do the right
thing for American workers. We can and should instruct the conference
committee to adopt the Senate language on cash balance plans.
Mr. Speaker, there are some who support cash balance schemes. They
argue that these plans benefit employees. Well, interestingly, a couple
of years ago I asked the Congressional Research Service a simple
question: What would happen if Members of Congress had their pensions
converted to cash balances?
If it is a good idea for millions of American workers, it must be a
good idea for us, right? We want to lead. Well, guess what, very few
Members of Congress thought it was a good idea for this institution. So
if it is not good for the Members of Congress, I think it is not good
for the American working people, and I urge strong support for the
Miller amendment.
{time} 1800
Mr. GEORGE MILLER of California. I yield 3 minutes to the gentleman
from Ohio (Mr. Kucinich), a member of the committee.
Mr. KUCINICH. Mr. Speaker, I strongly support the Miller motion to
instruct conferees. This motion to instruct supports the bipartisan
Senate compromise language that will protect older workers.
Now, H.R. 2830 does a great disservice to older workers by denying
the reality that conversions from traditional defined benefit plans to
cash balance plans harm older workers. A report released in early
November by the GAO found that a majority of older workers experienced
deep cuts in their pension when converted from a traditional plan to a
cash balance plan without transition protections. This is not only
unfair, it is wrong. Providing transition protections for older workers
should not be a choice for employers. It should be a requirement. Any
change in plans must protect the accrued benefits of employees, and the
conference report should reflect that reality.
It is a myth to believe that cash balance plans are innocuous. For
older workers especially, these plans are hazardous. A pension plan is
worth nothing if it does not provide security for employees, and these
plans translate into increased vulnerability for workers as they
retire.
Hard working employees should not be rewarded for their service with
a denial of pension benefits. I urge my colleagues to help ensure that
workers' pensions are protected by supporting the Miller motion to
instruct conferees. Let's stand up for people who work a lifetime and
were told at the beginning of their work experience the money was going
to be there to enjoy their golden years. Support the Miller amendment
and put some teeth behind that guarantee.
Mr. GEORGE MILLER of California. Mr. Speaker, I yield 3\1/2\ minutes
to the gentlewoman from Ohio (Mrs. Jones).
[[Page H1618]]
Mrs. JONES of Ohio. Mr. Speaker, I serve on the Ways and Means
Committee, and I rise in support of Mr. Miller's motion to instruct
conferees.
Eliminating wear-away, or the fact that dollars for older workers
under a cash balance plan tend to wear away in value, is very
important. We need to ensure that when an employer converts from a
traditional defined benefit plan to a cash balance plan, workers
receive their full benefits. But we also need to ensure that we draft
rules that protect older workers, because they could be vulnerable
during such conversions.
But more importantly, I want to talk about the issue of
retroactivity. Addressing retroactivity is important to the retirement
security of many American workers in my congressional district.
Employers that sponsor cash balance plans and other hybrid plans have
been hanging in limbo for almost 7 years.
The Internal Revenue Service has felt it necessary to temporarily
stop issuing determination letters for converted hybrid plans, and
litigation throughout our court system has left the legality of all
cash balance plans up in the air.
In my congressional district, I have four major employers that offer
pension benefits to their employees through either a cash balance or
other hybrid pension plan. Some of these plans were acquired through
mergers/acquisitions while some were adopted through conversions.
The employers treated their employees fairly, giving them the choice
whether or not to convert the plans, and ensuring that worker benefits
were not diluted, and these four employers are not alone. There are a
lot of good actors across the country.
According to a recent AARP-funded study, 23 of the largest 25 cash
balance plans, or 92 percent, provided transition protections for their
older employees when converting from traditional defined benefit plans
to cash balance plans.
Nonetheless, the four employers in my district, as well as 1,100
others across the country, are caught in a web of legal uncertainty. We
are in an era where companies are eliminating their pension plans,
including hybrid plans; not fixing this problem will only perpetuate
that trend.
A recent survey of planned sponsors by Watson Wyatt showed that more
than 25 percent of our employers who offer a hybrid pension plan either
froze their plan or were actively considering terminating or freezing
their plan.
A cash balance is a defined benefit plan, and it is the future of our
defined benefit system. It allows people to move from one employer to
the other employer. But we need to give them protections in that
process.
If Congress does not resolve the legal uncertainty that cash balance
plans currently face, employers will continue to terminate their
pensions. That would not be beneficial to the retirement security of
hard working Americans.
The conferees need to address retroactivity and establish benefit
accrual standards and establish benefit accrual standards as it relates
to age discrimination and that encourage employers to retain their cash
balance plans and not dump them.
For Congress to not resolve this issue would be unwise public policy
and would put the retirement security of thousands of workers at risk.
This is our chance to fix the problem. We must seize it. On behalf of
the workers and companies, let's clear up this confusion and put
workers back in the right place.
Mr. GEORGE MILLER of California. Mr. Speaker, I yield 3 minutes to
the gentleman from Minnesota (Mr. Gutknecht).
Mr. GUTKNECHT. Mr. Speaker, there are a lot of issues we talk about
here on the House floor where Members don't know much about the issue
they are talking about. This may be one for me. But I did serve on the
Pension Commission of the State of Minnesota and I know something about
defined benefit plans. I know something about defined contribution
plans, and I understand how pension plans in general work, and so I
rise in support of the Miller motion.
The reason this issue is here, and my colleague from Ohio just
described it very well, the reason we are here is that we are now in
the process where many employers are converting their pension plans
from old defined benefit plans to this new hybrid plan called a cash
balance plan. And I am not opposed to that basic notion.
But what happens, Members, and you need to understand, is many older
workers show up for work one day and their pension plan has changed.
Now, the employers say, well, that is our pension plan and it is our
money. Well, that is not exactly true. That money is being held in
trust, and this has been a very craftily done procedure to allow many
employers or some employers to take money from the pension plans and
convert it to their bottom line, and that is wrong. This is not their
money. That is the first point everybody needs to understand.
The second thing people need to understand is the Senate did a better
job of writing their bill. This is all here because of a few bad
actors, and the Senate said we are not going to protect those bad
actors, and so the Senate did a better job. We wouldn't even be talking
about this if we had all agreed on some language that would have
protected those older workers.
Members, this is the right thing to do, and I want to say to my
Republican colleagues, what we are talking about here is language that
was inserted by the Senator from Iowa, who is a Republican. Okay? This
is not a Republican issue. It is not a Democrat issue. It is not right
versus left. It is right versus wrong. It is wrong to allow a certain
number of employers to get their hands into the pension funds and to
change these pension plans without talking to their workers. It
happened at IBM and they were taken to court and Federal court ruled
that this is age discrimination. And do you know what? I agree with
that Federal court.
So Members, please support the Miller motion to instruct. All we are
saying is we want the Grassley language in the final product when it
comes back from conference. If we do that, we will have served the best
interest of working Americans, and I think we will have served those
employers who are doing the right thing, and we will send a clear
message to those employers who either have done the wrong thing or want
to do the wrong thing, that we are not going to put up with that.
This is a good motion. It is not a Republican motion. It is not a
Democrat motion. We are simply saying, let's keep the Grassley language
in the final product.
I rise in support of this motion to instruct conferees. The motion
instructs the conferees to adopt the Senate provisions on cash balance
plans in S. 1783 written by Senator Grassley and his Committee and
passed by the Senate by a vote of 97-2.
These are common sense reforms supported by the vast majority of the
Senate and AARP.
I supported H.R. 2830, the Pension Protection Act of 2005, when it
passed the House. At the time, I noted it contained a weakness that I
wanted to see addressed in conference committee. The weakness of the
House bill is that it does not have strong rules regulating the
conversion of defined benefit pension plans into cash balance plans. On
the other hand, under the Senate bill, employees would be given added
protections so that older employees are not put at a disadvantage when
conversions take place.
Millions of Americans are currently vested in defined benefit pension
plans. Even though they may be working for a very profitable company,
they could show up for work one day and learn that their promised
benefits have been dramatically reduced with the sweep of a pen. This
is what happened to thousands of employees in my district.
Millions of Americans will be affected by this legislation. It is
important we get it right. I ask my colleagues to support the Miller
motion to instruct.
Mr. GEORGE MILLER of California. Mr. Speaker, I yield 2 minutes to
the gentleman from Massachusetts (Mr. Tierney), a member of the
committee.
Mr. TIERNEY. Mr. Speaker, I would like to add my words in agreement
with the gentleman from Minnesota, that this is not a partisan motion
in any sense of the word. This is something that Members of Congress, I
think, can get behind and clearly feel comfortable that they are just
serving the interests of their constituencies.
This particular motion does take the language from Senator Grassley,
on the other side of the House, that puts it into the bill that it
would prohibit the wearing away, the practice by which
[[Page H1619]]
some employers have discriminated against older workers when they
offset the benefits that were already earned against their ability to
earn new benefits under these new cash benefit plans. They can result
in no new benefits being added, actually, for workers' pensions for up
to 10 years.
And they provide for a fair transition for rules to protect workers'
pensions when they do convert the traditional pensions to those so
called cash balance pension plans.
We critically need this. You only need to talk to the people in your
districts, my colleagues, and you will find a growing sense of
insecurity in this country as corporations back off their
responsibilities for health insurance, back off their responsibilities
for retirement plans, and now come up with a cash balance plan which is
supposed to be a plan melding two different types of retirement
programs and ends up hurting some.
One of my constituents talked about having worked for AT&T for 30
years. After 30 years of loyal work, the conversion of her pension to a
cash balance plan reduced her benefits by 46 percent. It is not fair.
It is not right, and it shouldn't be acceptable to Members of this
Congress.
The Government Accountability Office released a major report on cash
balance plans last November. They found that workers of all ages
experience significant cuts to their retirement benefits when their
employers switch from the traditional pension plan to the so-called
cash balance plans without first protecting employees rights.
Over 85 percent of 30-year-olds, 90 percent of 40-year-olds and half
of the 50-year-olds experience deep cuts in their retirement benefits
if they are shifted from a traditional pension plan into a cash balance
plan without protections for retirement benefits.
The GAO study did not find a single case, not a single case in which
the cash balance plan provided the same level of retirement benefits
that a typical defined benefit plan provided.
Without transition protection, almost all workers, including younger
workers, will lose up to 50 percent of their expected pension benefits.
And, Mr. Speaker, we can't allow that to happen.
I ask my colleagues to join with Mr. Miller in this attempt to make
sure that we do protect this group of pensioners.
Mr. McKEON. Mr. Speaker, I yield such time as he may consume to the
gentleman from North Dakota (Mr. Pomeroy), my friend from the other
side of the aisle.
Mr. POMEROY. Mr. Speaker, I am going to oppose this motion to
instruct. I certainly think there is a good intention behind it.
Clearly, all of us have been concerned when we have had some of these
conversions from a traditional pension plan to a hybrid plan, and older
workers have suddenly found that they have been terribly disadvantaged
in the conversion, seen their pension benefits and expected pension
benefits reduced significantly.
But here is why I don't like this motion. It fails to really address
this issue in the context of what is in the marketplace. You have got
defined benefit pensions that pay an annuity for as long as the
employer lives. I think we should work together to make sure defined
benefit pensions continue in the marketplace to the extent possible.
To the extent we don't have a defined benefit pension, alternative
employee benefits relative to retirement include a 401(k) plan, which
is essentially a savings account, and then there is something in
between, a hybrid plan that does capture the annuitized feature of the
pension, calculated in a different way than the traditional pension
calculation.
Now, it is important that we have best practices and fair treatment
in the conversion of a pension to a hybrid plan. But guess what? If we
overly regulate the conversion from the pension to the hybrid plan, the
employer will simply say, okay, we will go from the pension to the
defined contribution plan. We are not going to make this intervening
stop in the hybrid option, the cash balance option. We are just going
to either scrap the benefit altogether or go right to the defined
contribution plan.
I am convinced that that is not in the interest of workers, and that
is why I am convinced that the Senate approach, which is advanced by
this motion to recommit, actually does not help the very workers that
we care about and we intend to help.
There is no question about the sincerity of the language by the
proponents of this motion. They care about protecting older workers. It
is just that, technically, what they have put before this body in a
motion to recommit does not do that. I believe it actually may
disadvantage the very people they hope to help by instead of moving to
cash balance hybrid plans that at least preserve some features of the
pension, they will just scrap that option altogether. I don't see
anybody winning under that proposal. I urge a ``no'' vote.
{time} 1815
Mr. McKEON. Mr. Speaker, I yield such time as he may consume to the
gentleman from Florida (Mr. Foley), member of the Ways and Means
Committee.
Mr. FOLEY. Mr. Speaker, let me start by suggesting that I know all of
us in this room are concerned about the viability of pensions. We want
people who have worked their entire life to get the benefit of those
investments. What we are also, though, trying to do is ensure that
employers, corporations find a way in which to bring about the new
realities of the marketplace, providing options.
For years people who worked in America relied on the standard fixed
pension provided by, say, General Motors or another corporation. Over
the years evolved opportunities to create hybrid plans, plans
personally that I enjoy, an IRA account, a 401(k) offered through
Congress, Thrift Savings, Keogh plans, and you can go on with all of
the acronyms, Roth IRA, all designed to give people options in a
marketplace, to give them some degree of certainty and some opportunity
to provide these benefits.
Nine million workers today rely on the benefits for safe and secure
retirement, which is an important number to note. What we are trying to
figure out is how to create plans, cash balance plans, that provide
both the liquidity and the opportunity to continue.
Adelphia is claiming bankruptcy. GM is on the verge. Large
corporations are all suggesting that they are going to file based on
their pension benefit problems that they are experiencing. We have seen
it in the airline industry. So I think it is more important now than
ever that we come up with an opportunity to both solidify and provide
options. Distorting the facts will not help. Painting a misleading,
inaccurate picture will not help. Suggesting somehow that we are
chasing people out of defined pensions and creating this uncertainty I
do not think is a true portrayal of the actions today.
The conclusions emerging from a growing body of independent research
by economists and academics at some of the Nation's most respected
institutions, and I quote this from Mr. McKeon's opening statement
because I think it is important to underscore, including the Federal
Reserve Board, the Urban Institute, the Brookings Institute, and the
Wharton School, not only are hybrid plans especially advantageous for
women and lower-paid workers, but they also comprise the only part of
the defined benefit system that is growing. Hybrid plans now provide
the Pension Benefit Guaranty Corporation with approximately 25 percent
of its premium income. And I need only remind our Members of Congress
PBGC is sliding on thin ice. So if they are actually getting derived
revenue from this opportunity, we should not only be encouraging it. We
should hopefully be expanding it.
As we know, those that are paying into the system like airlines and
others no longer can make contributions because they have specifically
filed for bankruptcy to take away those obligations and foist that
obligation back on PBGC, which is why I believe we are all working on a
solution. We are trying to find answers. And the total number of
defined benefit plans has decreased significantly over the last 20
years, so that tells you people are moving away from defined benefits,
looking for options. If we foreclose this option, make it more
difficult for this option and disparage this option and give people an
uncertainty, then fewer and fewer people will have any type of benefit
to look forward to after years of work.
[[Page H1620]]
The threat of liability is creating ongoing legal uncertainty and
undermining the retirement security of American workers. So I think and
suggest that the conversions are appropriate, that this bill is
appropriate, and I urge my colleagues to focus on the facts. And I
think they will agree, as they see the success of hybrid pension plans,
that these are, in fact, working for America, for both middle income,
middle management, and upper management to find ways to create a secure
and safe retirement for people who are investing in those companies,
their workplaces, so that they can then take care of their golden years
with some comfort.
Mr. GEORGE MILLER of California. Mr. Speaker, I yield 1 minute to the
gentlewoman from Texas (Ms. Jackson-Lee).
Ms. JACKSON-LEE of Texas. Mr. Speaker, I thank the distinguished
gentleman from California for his leadership.
I do not know why we have this controversy. I do not see anything
controversial about protecting, if you will, the rights of older
workers. And I might remind my colleagues that the House of
Representatives has already voted three times to require the Treasury
Department to protect older workers from age discrimination and cash
balance conversions.
This motion to instruct is simple. It provides protection for older
workers under cash balance conversion; but more importantly, it is part
of a negotiated Senate bill that has a bipartisan approach.
Mr. Speaker, I come from the city of fallen pensions, and that is, of
course, the city of Houston. I am reminded of the tears and the
disaster that occurred after the Enron collapse that showed that the
lack of security for pensions in general and certainly those of older
workers can be the actual collapse of a family.
This motion to instruct provides for prohibiting discrimination
against older workers by the practice of offsetting previously earned
pension benefits. I would only say we have voted for this before.
Uncloud the issue and vote the right way, for the Miller motion to
instruct to protect older workers' pensions.
Mr. McKEON. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, for the benefit of all those who are watching this
debate, let me just kind of let everybody know where we are. The Senate
passed a bill, a bipartisan bill. The House passed a bipartisan bill
with a vote of 294-132, some of the Democrats voting for the bill.
During the debate you have seen, we have had Republicans speak for the
Democrat side. We have had Democrats speak for the Republican side.
We are all concerned, as Mr. Foley said, about the workers of
America. Where we are now is we have each passed bills. A conference
has been appointed. Senator Enzi is chairman of the conference. We have
had a couple of meetings of the whole conference, and he is continuing
to work with all members of the conference, or most of the members of
the conference, to see that we get a bill out that will benefit the
workers of America.
As was already mentioned, in 1986 there were 172,642 defined benefit
plans. We are now down to 29,000. That is not a good direction. And the
problem is we have not had meaningful pension reform in over 20 years.
We are close now. This is a motion to instruct the conferees, to tell
them how to function in this conference that has been set up. These
motions are not binding, but they do give direction to conferees, and I
think it is important that we do this. It is a good process for all of
us to get to talk through this system. But the defined pension system
is a voluntary system, and those offering these benefits have been
leaving the system at an accelerating and alarming rate, and we are
concerned about that. If we continue to burden those providing pension
benefits with more and more mandates, that pace will increase even
more.
And who loses? The men and women depending on these pensions for
their retirement security. Simply put, short-sighted and politically
motivated mandates intended to help pension plan participants only end
up hurting them. And that is just what this motion to instruct would
do.
For the sake of both employers and employees alike, we need to
provide legal certainty for hybrid plans. The Pension Protection Act
will provide that. This motion to instruct will not.
I urge my colleagues to reject it and protect the portable and secure
benefits provided by hybrid plans to nearly 10 million Americans.
Mr. Speaker, I yield back the balance of my time.
Mr. GEORGE MILLER of California. Mr. Speaker, I yield myself such
time as I may consume.
It is very simple. There are millions of Americans that are caught in
this trap, the gap between what they would have gotten and what they
will get under a pension conversion. You know what is in this gap? The
dreams, the aspirations of hardworking Americans about their
retirement, their plans for their grandchildren, their plans for
themselves, their health security. That is what they were planning on
paying for out of this gap. That is what they lose in a conversion.
All we are saying in this effort is to simply provide these people
the additional protections that the Senate provided by 97-2. Now, we
know this is a very partisan Congress, but 97 people came together and
decided to try to help these individuals. They still allow for the
conversions to cash balance. They provide the certainty that the
employers want, and they provide the protection that the employees
need.
Now, this House can continue to follow the Republican bill, the
Republican direction on pensions that has made the pension plan less
secure, made the pension plan more in jeopardy, whether it is the
taxpayers who are at risk or the employees who are at risk. That is the
wrong direction. Finally, on a bipartisan basis, a choice was made to
go in a different direction, to stop this failed policy.
Pick up your USA Today. Read your USA Today today, and you will see
that they make it clear that the bill that is currently in conference,
the House bill, puts pensions in greater jeopardy with greater risk,
that it will raise the risk that these people will lose their pensions.
Why? Because the Republicans continue to let you manipulate the pension
data. You can say that your employees are going to die younger so you
will not have to pay out as much money. Whether they will or not has no
bearing in fact.
So what are we doing here? We are trying to go in a different
direction. We are trying to go in the direction of pension security, of
retirement security, of peace of mind for people who are working hard,
understanding that these employees earn these pensions and they should
not lose them because some accountant can just come along and change it
with the whisk of a pencil. It is not fair to those individuals. That
is about the values of those people who are working hard. It is about
young people knowing that their parents will be taken care of, that
they will be able to have that retirement security.
Millions of Americans are watching as pension plans are crashing to
the floor, as conversions are made and older workers are jettisoned in
terms of these protections.
But you can change that with this motion to instruct. You can change
it along the lines of a bipartisan consensus in the Senate which said
you can both protect these workers, have the certainty of your
conversions, and allow employers to choose to have conversions or
defined benefit plans. It is the best of all worlds. It is the
fairness.
The other reason Republicans can vote for it tonight is because I
understand the Republican leadership said go ahead and vote your
conscience. Well, tonight we will find out about the Republican
conscience. Do they really want to take care of older Americans who are
terrified about their retirement security? We will find out tonight,
won't we? Because you do not have to jeopardize cash balance. You do
not have to jeopardize the certainty of discrimination. But you do get
to take care of the retirees, and you can do it all in one vote: a
motion to instruct here.
So I suggest you come on down and let us change the direction of
retirement security from insecurity that is now being presented by this
conference committee, by the Republican bill, to one of security for
America's workers, for America's retirees, to make sure that they will
have the ability to take care of themselves and their families in
[[Page H1621]]
the future. It is fundamental. It is basic. It is about fairness. It is
about the direction of this country. We have got to change it.
The SPEAKER pro tempore (Mr. Kuhl of New York). Without objection,
the previous question is ordered on the motion to instruct.
There was no objection.
The SPEAKER pro tempore. The question is on the motion to instruct
offered by the gentleman from California (Mr. George Miller).
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.
Mr. GEORGE MILLER of California. Mr. Speaker, on that I demand the
yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, this 15-
minute vote on the motion to instruct conferees on H.R. 2830 will be
followed by 5-minute votes on the motion to instruct conferees on H.R.
4297 and on five motions to suspend the rules previously postponed.
The vote was taken by electronic device, and there were--yeas 248,
nays 178, not voting 6, as follows:
[Roll No. 93]
YEAS--248
Abercrombie
Ackerman
Aderholt
Allen
Andrews
Baca
Baird
Baldwin
Barrow
Bass
Bean
Becerra
Berkley
Berman
Berry
Bilirakis
Bishop (GA)
Bishop (NY)
Blumenauer
Boehlert
Boren
Boswell
Boucher
Boyd
Brady (PA)
Brown (OH)
Brown, Corrine
Burgess
Butterfield
Capito
Capps
Capuano
Cardin
Cardoza
Carnahan
Carson
Case
Chandler
Clay
Cleaver
Clyburn
Conyers
Cooper
Costa
Costello
Cramer
Crowley
Cuellar
Cummings
Davis (AL)
Davis (CA)
Davis (FL)
Davis (IL)
Davis (KY)
Davis (TN)
Davis, Jo Ann
Davis, Tom
DeFazio
DeGette
Delahunt
DeLauro
Dent
Dicks
Dingell
Doggett
Doyle
Edwards
Ehlers
Emanuel
Emerson
Engel
Eshoo
Etheridge
Farr
Fattah
Ferguson
Filner
Fitzpatrick (PA)
Forbes
Ford
Fortenberry
Frank (MA)
Frelinghuysen
Garrett (NJ)
Gerlach
Gilchrest
Gonzalez
Goode
Gordon
Green, Al
Green, Gene
Grijalva
Gutierrez
Gutknecht
Hall
Harman
Hastings (FL)
Herseth
Higgins
Hinchey
Hinojosa
Hobson
Holden
Holt
Honda
Hooley
Hoyer
Inslee
Israel
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Johnson (IL)
Johnson, E. B.
Jones (NC)
Jones (OH)
Kanjorski
Kaptur
Kelly
Kennedy (RI)
Kildee
Kilpatrick (MI)
Kind
King (IA)
King (NY)
Kirk
Kucinich
LaHood
Lantos
Larsen (WA)
Larson (CT)
Leach
Lee
Levin
Lewis (GA)
Lipinski
LoBiondo
Lofgren, Zoe
Lowey
Lynch
Maloney
Markey
Marshall
Matheson
Matsui
McCarthy
McCollum (MN)
McDermott
McGovern
McHugh
McIntyre
McKinney
McNulty
Meehan
Meek (FL)
Meeks (NY)
Melancon
Michaud
Millender-McDonald
Miller (NC)
Miller, George
Mollohan
Moore (KS)
Moore (WI)
Moran (KS)
Moran (VA)
Murphy
Murtha
Nadler
Napolitano
Neal (MA)
Ney
Oberstar
Obey
Olver
Ortiz
Owens
Pallone
Pascrell
Pastor
Payne
Pelosi
Peterson (MN)
Platts
Price (NC)
Pryce (OH)
Rahall
Rangel
Regula
Reyes
Ross
Rothman
Roybal-Allard
Royce
Ruppersberger
Rush
Ryan (OH)
Sabo
Salazar
Sanchez, Linda T.
Sanchez, Loretta
Sanders
Saxton
Schakowsky
Schiff
Schwartz (PA)
Scott (GA)
Scott (VA)
Serrano
Shays
Sherman
Sherwood
Simmons
Skelton
Slaughter
Smith (NJ)
Smith (WA)
Snyder
Solis
Spratt
Stark
Strickland
Stupak
Sweeney
Tauscher
Taylor (MS)
Thompson (CA)
Thompson (MS)
Tierney
Towns
Udall (CO)
Udall (NM)
Van Hollen
Velazquez
Visclosky
Wamp
Wasserman Schultz
Waters
Watt
Waxman
Weiner
Weldon (PA)
Wexler
Whitfield
Wolf
Woolsey
Wu
Wynn
NAYS--178
Akin
Alexander
Bachus
Baker
Barrett (SC)
Bartlett (MD)
Barton (TX)
Beauprez
Biggert
Bishop (UT)
Blackburn
Blunt
Boehner
Bonilla
Bonner
Bono
Boozman
Boustany
Bradley (NH)
Brady (TX)
Brown (SC)
Brown-Waite, Ginny
Burton (IN)
Calvert
Camp (MI)
Campbell (CA)
Cannon
Cantor
Carter
Castle
Chabot
Chocola
Coble
Cole (OK)
Conaway
Crenshaw
Cubin
Culberson
Deal (GA)
DeLay
Diaz-Balart, L.
Diaz-Balart, M.
Doolittle
Drake
Dreier
Duncan
English (PA)
Everett
Feeney
Flake
Foley
Fossella
Foxx
Franks (AZ)
Gallegly
Gibbons
Gillmor
Gingrey
Gohmert
Goodlatte
Granger
Graves
Green (WI)
Harris
Hart
Hastings (WA)
Hayes
Hayworth
Hefley
Hensarling
Herger
Hoekstra
Hostettler
Hulshof
Hunter
Hyde
Inglis (SC)
Issa
Istook
Jenkins
Jindal
Johnson (CT)
Johnson, Sam
Keller
Kennedy (MN)
Kingston
Kline
Knollenberg
Kolbe
Kuhl (NY)
Latham
LaTourette
Lewis (CA)
Lewis (KY)
Linder
Lucas
Lungren, Daniel E.
Mack
Manzullo
Marchant
McCaul (TX)
McCotter
McCrery
McHenry
McKeon
McMorris
Mica
Miller (FL)
Miller (MI)
Miller, Gary
Musgrave
Myrick
Neugebauer
Northup
Norwood
Nunes
Nussle
Osborne
Otter
Oxley
Paul
Pearce
Pence
Peterson (PA)
Petri
Pickering
Pitts
Poe
Pombo
Pomeroy
Porter
Price (GA)
Putnam
Radanovich
Ramstad
Rehberg
Reichert
Renzi
Reynolds
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Ryan (WI)
Ryun (KS)
Schmidt
Sensenbrenner
Sessions
Shadegg
Shaw
Shimkus
Shuster
Simpson
Smith (TX)
Sodrel
Souder
Stearns
Sullivan
Tancredo
Taylor (NC)
Terry
Thomas
Thornberry
Tiahrt
Tiberi
Turner
Upton
Walden (OR)
Walsh
Weldon (FL)
Weller
Westmoreland
Wicker
Wilson (NM)
Wilson (SC)
Young (AK)
Young (FL)
NOT VOTING--6
Buyer
Evans
Langevin
Schwarz (MI)
Tanner
Watson
{time} 1856
Messrs. BARRETT of South Carolina, PICKERING, NEUGEBAUER, RADANOVICH,
BOOZMAN, MARCHANT, REHBERG, POMEROY and FOSSELLA changed their vote
from ``yea'' to ``nay.''
Messrs. GARRETT of New Jersey, WAMP, BACA, RUSH, NEY, WHITFIELD,
JOHNSON of Illinois, BASS, RYAN of Ohio, DAVIS of Kentucky, HALL and
FORBES, Ms. BEAN and Mrs. JO ANN DAVIS of Virginia changed their vote
from ``nay'' to ``yea.''
So the motion to instruct was agreed to.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
Stated for:
Mr. SCHWARZ of Michigan. Mr. Speaker on rollcall No. 93 I was
unavoidably detained. Had I been present, I would have voted ``yea.''
____________________