[Congressional Record Volume 152, Number 106 (Thursday, August 3, 2006)]
[Senate]
[Pages S8747-S8765]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     PENSION PROTECTION ACT OF 2006

  The PRESIDING OFFICER. Under the previous order, the Senate will 
proceed to the consideration of H.R. 4, which the clerk will report by 
title.
  The legislative clerk read as follows:

       A bill (H.R. 4) to provide economic security for all 
     Americans, and for other purposes.

  The PRESIDING OFFICER. Under the previous order, there are 20 minutes 
equally divided between the two leaders.
  The Senator from Wyoming.
  Mr. ENZI. Mr. President, I allocate myself 7 minutes of the 10 we 
have on our side.
  A year ago, we were working on a pension bill, and we were working on 
the bill in two separate committees. We passed bills out of both 
committees. Then the two committees met together, and we merged it into 
one bill. There were a lot of difficulties in doing that process. It 
took quite a while. At the end of November we still had several 
problems and because of that, the media pronounced the bill dead. A 
week later, we had revived it and passed it in the Senate with just two 
votes in opposition to it and 97 in favor. All that in just 1 hour. 
Then it was brought to life on the House side. They passed the bill in 
December of 2005.
  Then, in March 2006, a conference was named, and we worked on it 
diligently for hours virtually every day. A lot of moving parts started 
to fit into place. Some wondered if it would never get done.
  I looked up the last major revisions we did on a pension bill. They 
were not nearly as expansive as this. This is the biggest revision of 
pension laws to be enacted in the past 32 years.
  I noticed, in 1987, a big pension reform conference started in early 
March. The conference committee started a little earlier, but the bill 
was enacted until December 22. In 1994, there was a second pension 
reform conference. Again, the conference started in March of that year. 
The conferees wound up the conference agreement a little earlier than 
in 1987. This time, the bill was enacted on December 8, 1994. So we are 
way ahead of schedule compared to those two conferences. But we had to 
do it in a little different method than we might have liked to get to 
this point. Nevertheless, it is the most sweeping amendment to ERISA 
and the Internal Revenue Code in over 30 years. It is nearly identical 
to the product and agreements made by the members of the conference 
committee in a bipartisan manner. I am proud we have before us the most 
sweeping changes to our Nation's retirement laws since the enactment of 
ERISA itself.
  This legislation will provide greater security for our Nation's 
workers who have retirement benefit plans and greater stability for the 
Pension Benefit Guaranty Corporation. There is little doubt this bill 
will be the foundation on which the future of our retirement system 
rests.
  Today, we secure the future for American workers and their families. 
We ensure their hard work is rewarded and their hard-earned dollars go 
towards their retirement needs.
  At the outset of the pension debate, I laid out three guiding 
principles that must be followed when the bill is enacted. Each of 
these has been satisfied in this bill that I am proud to have helped 
craft as chairman of the conference committee.
  The first guiding principle is: The money workers earn for retirement 
must be there when they retire. This legislation contains tougher 
funding rules to ensure the money is there when workers enter 
retirement.
  The pension bill puts an end to phony pension accounting rules that 
inflated the apparent value of pension plans, relied on inaccurate 
measurements of liabilities, and permitted funding holidays through the 
use of credit balances when plans were seriously underfunded.
  Promises made to workers for their retirement will be promises kept 
by assuring the money needed is in the fund and by appropriately 
limiting when benefits may be increased, freezing future accruals, and 
restricting the rapid out-flow of lump sums and shutdown benefits when 
the plan gets into serious trouble. The bill also imposes discipline on 
management by restricting new executive compensation when pension plans 
are in trouble.
  The second guiding principle is: The new rules we craft should not be 
so draconian that they become the cause of more bankruptcies and 
pension plan terminations.
  The conference committee leaders spent nearly 4 months debating this 
exact point with regard to ``at risk'' triggers. In the final bill, I 
believe we have found a proper balance.
  The legality of cash balance and other hybrid pension plan designs is 
clarified on a prospective basis under ERISA, the Internal Revenue 
Code, and the Age Discrimination in Employment Act, thus ending legal 
challenges that have driven hundreds of quality employers out of the 
defined benefit system. We have always felt that these plans are valid 
under the Code, ERISA and the ADEA.
  The final guiding principle is: A taxpayer bailout of the PBGC is not 
an option. The full faith and credit of the United States does not 
stand behind the private pension insurance systems, and I am committed 
to keeping it that way by shoring up the finances of the agency without 
a taxpayer bailout.
  The legislation repeals the full funding exemption on the variable 
rate premium which reduces the deficit at the PBGC by billions over the 
next 10 years. With this single vote, we will make the most sweeping 
changes to ERISA since its enactment in 1974.
  I urge my colleagues to vote in favor of this bill. Our future 
generations are counting on it.
  I ask unanimous consent that the following letters be printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                   Pension Benefit


                                         Guaranty Corporation,

                                 Washington, DC, October 14, 1993.
       We write in response to your inquiry. You ask whether the 
     PBGC adheres to the interpretation of section 4225 of the 
     Employee Retirement Income Security Act of 1974 (``ERISA''), 
     as amended by the Multiemployer Pension Plan Amendments Act 
     of 1980 (``MPPAA''), set forth in its amicus curiae brief in 
     Trustees of the Amalgamated Insurance Fund v. Geltman 
     Industries, 784 F.2d 926 (9th Cir. 1986). In its brief, PBGC 
     addressed the proper application of ERISA Sec. Sec. 4225(a) 
     and 4225(b) where the withdrawn employer

[[Page S8748]]

     satisfies the prerequisites for the application of both 
     subsections. PBGC expressed the view that an employer meeting 
     the criteria in both subsections (a) and (b) may elect the 
     limitation that yields the lesser of the amounts determined 
     under the two subsections. The Ninth Circuit, however, 
     reached a contrary conclusion. 784 F.2d at 929-30. For the 
     reasons set out below, PBGC continues to believe that its 
     interpretation of ERISA Sec. Sec. 4225 (a) and 4225(b) is 
     correct as a matter [*2] of law.
       Under ERISA Sec. 4225(a)(1)(A), an employer who withdraws 
     in connection with a ``bona fide sale of substantially all of 
     [its] assets in an arm's-length transaction to an unrelated 
     party'' will ordinarily be permitted to retain a portion of 
     its dissolution value. The Geltman court, however, citing 
     ``the language and . . . structure'' and the ``underlying 
     policies of ERISA and MPPAA,'' concluded that an 
     ``insolvent'' employer must be denied relief under subsection 
     (a)(1)(A), because subsection (b) provides a different 
     liability limit that is explicitly directed to ``an insolvent 
     employer undergoing liquidation or dissolution.''
       This analysis overlooks several pertinent points. First, 
     when Congress intended to deny classes of employers relief 
     under section 4225, it did so explicitly. See ERISA 
     Sec. 4211(d) (prohibiting application of section 4225 to 
     employers who withdraw from coal-industry pension plans). 
     Significantly, nothing in the language of section 4225 
     suggests that subsections (a) and (b) are mutually 
     exclusive.\1\ The two provisions have separate factual 
     prerequisites, and provide different types of relief. So long 
     as an employer satisfies the requirements of both 
     subsections, [*3] it should qualify for relief under either 
     rule, and its liability should not exceed the lesser of the 
     amounts determined under the two subsections.
       \1\ Sections 4225(a) and (b) both begin with the phrase 
     ``in the case of an employer.'' The Geltman court suggested 
     this phrase was ``evidence that the sections are to operate 
     exclusive of each other. . . .'' This suggestion is 
     manifestly incorrect. The phrase ``in the case of'' is used 
     as an introduction to at least 30 provisions of MPPAA; in 
     each such instance, it is used in its normal statutory sense, 
     as a synonym for ``when'' or ``if''. 20A Words and Phrases 75 
     (1959 & Supp. 1983).
       This conclusion is further supported by the technical 
     definition of ``insolvency'' included in section 4225. Under 
     section 4225(d)(1), ``an employer is insolvent if [its] 
     liabilities, including withdrawal liability under the plan 
     (determined without regard to subsection (b)), exceed [its] 
     assets (determined as of the commencement of the liquidation 
     or dissolution)'' (emphasis added). Section 4201(b)(1)(D) 
     defines ``withdrawal liability'' as including adjustment 
     pursuant to section 4225. Thus, the use of the term 
     ``withdrawal liability'' in the definition [*4] of insolvency 
     incorporates any reductions in withdrawal liability resulting 
     from the application of section 4225 (including subsection 
     (a)) except the reduction set out in section 4225(b), which 
     is specifically excluded.\2\
       \2\ The decision is therefore incorrect when it states that 
     whether ``an employer is an insolvent employer . . . is done 
     by looking to the provisions of [section 4225(d)(1)] without 
     regard to [section 4225(a)].'' Geltman, 784 F.2d at 929.
       PBGC believes that its interpretation of section 4225 is 
     fully consistent with the ``underlying policies of ERISA and 
     MPPAA.'' Section 4225 is but one of several ERISA provisions 
     that limit the amount of withdrawal liability imposed upon 
     withdrawing employers.\3\ Nothing in the congressional 
     findings and policy declarations that preface MPPAA indicate 
     that the withdrawal liability limitation provisions should be 
     construed to maximize the liability of an employer. See MPPAA 
     Sec. 3, codified at 29 U.S.C. Sec. 1001a. The same is true of 
     the legislative history.
       \3\ See, e.g., ERISA Sec. Sec. 4203 (b), (c), (d), and (f), 
     4204, 4207, 4208, 4209, 4210, 4217, 4218, 4219(c)(I)(B), 
     4224, and 4225. The Supreme Court has noted with approval 
     Congress's efforts to moderate the impact of withdrawal 
     liability on employers, including Congress's effort in 
     section 4225. Connally v. PBGC, 475 U.S. 211, 225, 226 n.8 
     (1986).
       Finally, the interpretation offered in Geltman makes little 
     economic sense. Under the rationale of the decision, an 
     employer whose liabilities exceeded its assets by only one 
     dollar is ``insolvent'' and would automatically forfeit any 
     relief under section 4225(a)(1)(A). In contrast, if the 
     employer's assets were one dollar greater than liabilities, 
     the full liability limitation would apply.\4\ As discussed 
     above, the application of the plain language of the statute 
     avoids this sort of anomaly.
       \4\ The attached table, drawn from the PBGC's amicus brief, 
     illustrates the dramatic increase in employer liability 
     caused by the single dollar difference.
       In conclusion, the plain wording of section 4225 dictates 
     that an employer that meets the requirements of both 
     subsections (a) and (b) is entitled to an assessment of 
     withdrawal liability that does not exceed the lesser of the 
     amounts determined under (a) and (b). Neither the legislative 
     purpose nor principles of statutory construction compel a 
     contrary conclusion. The PBGC therefore continues to adhere 
     to the position stated in its brief amicus curiae.
       I trust this responds to your question. If you have further 
     questions regarding this matter, please contact Karen Morris 
     of my staff.
                                               Carol Connor Flowe,
                                                  General Counsel.


                                ADDENDUM

       Computation of Withdrawal Liability Under Arbitrator's 
     Interpretation in Geltman Industries and Amelgamated 
     Insurance Fund, of Section 4225.
       Assumptions: 1. The value of the employer's assets after 
     the sale is $100,000; 2. The employer's liabilities other 
     than withdrawal liability are $90,000; 3. The unfunded vested 
     benefits allocable to the employer prior to the application 
     of section 4225 are $10,000 in Example 1 and $10,001 in 
     Example 2.

 
------------------------------------------------------------------------
    Maximum Withdrawal Liability Under Sec.
                    4225(a)                      Example 1    Example 2
------------------------------------------------------------------------
1. (a)(1)(A): 30% of the liquidation value of        $3,000
 the employer = .30X($100,000-$90,000)........
2. (a)(1)(B): unfunded vested benefits          ...........          N/A
 attributable to employees of the employer $0
 or undetermined..............................
3. Greater of (a)(1)(A) or (B) (#1 or #2).....        3,000
4. (b)(1): 50% of allocable unfunded vested     ...........    $5,000.50
 benefits = .50X$10,00........................
5. (b)(2): additional amount due plan                   N/A        4,999
 (remaining liquidation value after #4).......
6. Total collectible under (b) (sum of #4 and   ...........       10,000
 #5)..........................................
7. Amount paid to Plan........................        3,000       10,000
8. Amount paid to creditors other than Plan...       90,000       90,000
9. Amount retained by employer................        7,000            0
------------------------------------------------------------------------

                                Congress of the United States,

                                    Washington, DC, July 27, 2006.
       Dear Conferee: Throughout the last 18 months as Congress 
     has worked on pension reform legislation, we have crafted a 
     bipartisan compromise that addresses needed reforms to 
     identify and rehabilitate troubled multiemployer pension 
     plans. Under this compromise, workers and employers can be 
     assured of predictability and transparency in their pension 
     plans.
       This compromise includes new, accelerated funding 
     requirements for all multiemployer pension plans. It provides 
     for enhanced disclosure for workers, retirees, and employers 
     who contribute to these pensions. And it requires pension 
     plans with financial difficulties on the horizon to meet 
     strict goals to avoid these problems.
       The most troubled pension plans--the so-called ``red zone'' 
     pensions--would be required to adopt a rehabilitation plan to 
     reach healthy funding status. The plan may require a 
     combination of employer contribution increases, expense 
     reductions, funding relief measures and restrictions on 
     future benefit accruals. In certain extraordinary 
     circumstances a rehabilitation plan may also reduce or 
     eliminate certain ancillary pension benefits for workers who 
     have not yet retired. This limited authority is necessary to 
     ensure the continued viability of the most poorly-funded 
     plans. These changes must be adopted by all bargaining 
     parties, both management and labor trustees.
       Our bi-partisan compromise also requires multiemployer plan 
     trustees to impose upon contributing employers, within 30 
     days after the plan provides the notice of reorganization 
     status, a series of automatic contribution surcharges. The 
     surcharge will end when a new collective bargaining agreement 
     is implemented that adopts a schedule of benefits based on 
     the rehabilitation plan.
       We believe that all of these reforms are critical to 
     safeguarding the multiemployer pension system and protecting 
     workers' benefits. We look forward to working with you to 
     address the challenges facing America's workers and retirees.
                                                  John A. Boehner,
                        Majority Leader, House of Representatives.
                                                Edward M. Kennedy,
                            Ranking Member, Senate HELP Committee.

  Mr. ENZI. Mr. President, this bill is nearly identical to the product 
and agreements made by members of the conference committee in a 
bipartisan manner. I am proud that we have before us the most sweeping 
changes to our Nation's retirement laws since the enactment of ERISA 
itself.
  This legislation will provide greater security for our nation's 
workers who have retirement benefit plans and greater stability for the 
Pension Benefit Guaranty Corporations, PGBC. There is little doubt that 
this bill will be the foundation on which the future of our retirement 
system rests. Today, we secure the future for American workers and 
their families. We ensure their hard work is rewarded and their hard 
earned dollars go towards their retirement needs.
  I would like to review some important aspects of this legislation. 
For more than a year we have been working on a package of pension 
funding rules that will strengthen defined benefit plans and thus, 
protect plan participants from the fear of poverty in their retirement 
years. When I have concluded that, I will speak about the process 
surrounding the pension reform bill.
  We were motivated to make these changes for several reasons. First, 
plans were underfunded. This occurred due to numerous and complicated 
reasons. A key factor was the combination of low interest rates and 
lowered equity values that began in the year 2000. The intersection of 
these two economic events caused both defined benefit

[[Page S8749]]

plans and the federal agency that insures them, the PBGC to show big 
deficits. More money needed to go into the plans regardless of 
fluctuations in the economy.
  Underfunding was not caused solely by a drop in interest rates and 
equity values. It was also caused by loopholes in pension funding 
rules.
  Second, as plan deficits rose, required contributions to plans 
skyrocketed. This put struggling companies in financial peril. When the 
terrorist attacks occurred on 9/11 the cash flow of many of those same 
companies froze up. Without big reserves in the plans, they could not 
make their pension payments any longer. Some of them just declared 
bankruptcy. In turn, they dumped their pensions on the PBGC. Those 
pension plan failures were quite large. Among them were some steel 
companies and a couple of big airlines.
  PBGC premiums and asset recoveries from failed pension plans are not 
enough to cover the cost of paying benefits to participants of the 
failed plans. Every time there has been a pension plan failure, the 
PBGC's deficit worsens.
  Finally, a taxpayer bailout of the PBGC is not an option. Congress' 
adverse experience with the savings and loan problems of the past 
taught us a lesson: A taxpayer bailout of the PBGC is not an option. A 
taxpayer bailout of the pension insurance agency could only occur if 
the Congress provided for it. We did not provide for a taxpayer bailout 
of the PBGC in this bill. Instead, we corrected the pension funding 
rules.
  There have been murmurings in the media and on Capitol Hill that the 
bills produced in the House and Senate were somehow ``weaker than 
current law''. The facts plainly show that neither the House nor the 
Senate bill is weaker than current law and this new bill that the House 
introduced and passed on Friday July 28, 2006 is not weaker than 
current law either.
  Here are just a few examples of how the pension reform proposal is 
tougher than current law.
  Under the reform proposal: plans must be funded to 100 percent; plans 
must amortize their debts over 7 years; plans must use updated and 
accurate mortality tables; plans may not add inflated credit balances 
to deflated plan assets; liabilities must be valued using a modified 
yield curve that will better ``duration match'' assets and liabilities 
of the plans; smoothing for both assets and liabilities may be only 24 
months in duration; plans that are seriously underfunded must pay an 
additional contribution for ``at-risk'' plans. If plans are at-risk for 
a long enough period of time, they will be subject to an additional 
requirement to pay a ``load factor'' into the plan which assumes the 
plan may be at risk of terminating; benefit increases, lump sum payouts 
and additional accruals are prohibited for certain seriously 
underfunded plans; payment of shutdown benefits are severely restricted 
for plans that are underfunded; funding of executive compensation is 
prohibited when the plan covering rank-and-file workers is underfunded; 
and premiums payable for pension insurance are dramatically increased 
and will add billions of dollars to the coffers of the PBGC.

  By contrast, under current law a pension need be funded only to 90 
percent; liabilities are valued upon the four-year weighted average of 
a long-term corporate bond and assets are smoothed over as many as five 
year; a single accelerated payment is required for underfunded plans, 
but there is no load factor; credit balances are added to assets and 
can result in inappropriate contribution holidays and there are many 
other weaknesses in current law that have been corrected in the reform 
legislation.
  One industry that made a compelling case for special transition rules 
is the airline industry. Because airlines are vital to our economy, 
Congress agreed that different rules should apply to the plans of the 
legacy airlines. I am a little disappointed in the language from the 
House bill because it fails to treat all the legacy airlines equally. I 
admire the courage of a plan sponsor that makes the tough decision to 
freeze its plan. When a company is suffering from financial distress or 
the risk of it, it needs to freeze accruals. But if the company has 
made other financial sacrifices or the employees have made other 
concessions in order to keep the plan in place that should, (within 
limits), be a decision of the company.
  The Senate bill gave amortization extensions to all four legacy 
airlines but required the non-frozen plans to pay into their benefit 
plans at the ``at-risk'' rate. The frozen plans received a more 
favorable arrangement--but all the legacy airlines received some more 
or less equivalent treatment.
  Under the House bill, frozen plans receive 17 years to amortize their 
plan debt and an interest rate of 8.85 percent. The frozen plans would 
be prohibited from having a follow-on DB plan or a DC plan in which 
they pay matching contributions. If their plan should terminate within 
the next 10 years, for any reason other than a terrorist attack, or 
other similar event, severe termination premiums are to be imposed on 
the sponsoring company. This language controverts the provisions of the 
recently enacted reconciliation act, P.L. 109-171, that did not impose 
a termination premium on plans whose sponsor declared bankruptcy prior 
to October 18, 2005.
  By contrast, nonfrozen plans receive some limited leeway. They would 
obtain an amortization of ten rather than seven years for the 
liabilities accrued to date under their plan. They would not have to 
pay the deficit reduction contribution, DRC, for 2006 or 2007. That 
waiver of the DRC would be a big help to their finances until the new 
rules phase in.
  I prefer the language of the Senate passed bill, S. 1783. I am very 
sorry that the House did not see fit to accept the Senate language, as 
it was the result of many and long negotiations. The Nation cannot 
afford any more airline bankruptcies or terminations of airline pension 
plans. I hope this legislation will not worsen the finances of the 
legacy airlines or the pension plans they sponsor.
  The language we have before us makes other changes to law as well. 
For example, it provides clarification regarding the use of automatic 
enrollment programs for defined contribution plans. It establishes a 
new portable defined benefit plan that we refer to as the ``DB(k)'' 
plan. This retirement savings vehicle is especially appealing to small 
and medium sized companies. The legislation improves portability of 
retirement savings. It contains many beneficial changes to tax law 
affecting the provision of health care benefits for public safety 
officers of state and local governments and for savings in long-term 
care plans.
  There are also rules that recognize the unique situation of rural 
cooperatives that are very common in my home State and are vital to all 
rural parts of this Nation.
  In addition, the rules for calculating lump sum distributions have 
finally been updated in this legislation. The change for this 
calculation will be phased in very slowly so that participants will not 
be disadvantaged by any sudden change in the rate used to make these 
calculations. As is the case under current law, the new law allows a 
plan sponsor to use different assumptions, interest rates and/or 
mortality tables, to determine lump sum distributions so long as the 
plan provides that a participant's lump sum amount is no less than the 
present value determined in accordance with the provision in effect 
under this legislation.
  While single-employer pension funding problems have been quite 
visible, the funding problems of multiemployer pension plans, that is, 
plans that are sponsored by big labor unions and the employers who have 
an obligation to contribute to them, have been invisible. Ironically, 
the agency that is charged with protecting the integrity of the pension 
insurance system has consistently declined to recommend changes to the 
funding rules for these plans. Their argument is that the multiemployer 
plans are not a threat to the insurance system.
  I respectfully submit that, over time, these multiemployer plans have 
become an unseen threat to the pension insurance system and to the 
participants in the plans and the employers who must fund them. If 
there were not risk inherent in these plans, the plans would never have 
come to Congress asking for changes in their rules. The changes in the 
pension reform bill will postpone the possible collapse of some 
multiemployer plans, but it they will not cure it. Much remains work 
remains to be done in terms of multiemployer reform.

[[Page S8750]]

  Unlike the single-employer pension system which has been amended 
numerous times since its enactment in 1974, the rules governing 
multiemployer plans have been virtually untouched since the enactment 
of the rules covering these plans in 1980.
  In 2003 the multiemployer plans came up to Capitol Hill and asked for 
a blanket extension of amortization of their plan gains and losses. 
Congress pared back that request in the provisions applicable to 
multiemployer plans that appear in the 2004 Pension Funding Equity Act, 
PFEA.
  Since then, the unions and management agreed upon changes to ease the 
multiemployer pension funding standards for financially distressed 
plans. The changes made here identify plans that are seriously 
underfunded. They also establish benchmarks for improvement.
  The two special categories are for plans we consider to be 
``endangered'' versus those that are worse funded. Those are the plans 
in ``critical'' condition. At the behest of the union and management 
multiemployer coalition, we urge these plans to increase funding.
  Multiemployer plans are funded through contributions specified in 
collective bargaining agreements. The plans look like a defined 
contribution plan to the employers who pay for them since they pay a 
certain number of dollars per hour each participant worked under the 
plan. But, these plans function like, and they are, defined benefit 
plans for the individuals covered by them. Because the plans are funded 
by, in some cases hundreds of, collective bargaining agreements, 
improvements to overall funding cannot necessarily occur quickly.
  The new rules do not set painful improvement standards for 
underfunded plans. On the contrary, these new benchmarks for 
improvement are established with the complete approval of the 
multiemployer coalition. The new rules allow the plans to make modest 
increases in their overall funded status without necessarily making 
other sacrifices. There is one exception to this rule. That occurs when 
a plan is in so-called ``critical'' status. Under that circumstance, 
the multiemployer coalition asked for the right to eliminate early 
retirement subsidies for participants who are still working. Early 
retirement subsidies are an accrued vested benefit and under current 
law. They are protected from reduction or elimination by a plan 
amendment. Labor and management clearly felt that the underfunding in 
some multiemployer plans was so severe that the only way some of the 
plans could survive was to eliminate early retirement subsidies of 
those who are still working.
  It is no secret that I resisted that change. Cutbacks of early 
retirement subsidies were not reported out of the HELP Committee. 
Cutbacks were not passed by the Senate. The provision allowing cutbacks 
was added by the House of Representatives' bill.
  The issue of the cutback of previously accrued benefits is very 
controversial and a few clarifying points are needed. First, the 
drafters took great care to ensure that the decision to cutback accrued 
benefits is one that must be made by the plan trustees, and as part of 
the collective bargaining process. The language of the bill is clear, I 
believe, that any reduction of adjustable benefits can only be 
accomplished through a separate schedule. The language of the bill does 
not permit cutbacks in the default schedule.
  The legislation also provides a floor for benefit reductions, i.e., 
the so-called 1 percent rule. The bill makes clear, however, that the 
plan sponsor retains the ability to prepare and provide the bargaining 
parties with alternative schedules to the default schedule that 
establish lower or higher accrual and contribution rates than the rates 
otherwise required under the provision. Thus, the plan sponsor may 
supply schedules to the bargaining parties for their consideration that 
raise employer contributions higher than the default schedule or reduce 
benefit accruals below the specified 1 percent level. The legislation 
does not require the plan sponsor to go below the 1 percent benefits 
floor, but that is expressly permitted if the trustees and bargaining 
parties so choose.
  In the Health Education Labor and Pensions Committee, we worked on 
multiemployer funding reform legislation over the last year and a half. 
We heard testimony regarding the impact of existing multiemployer 
pension rules on small, privately held trucking-related companies that 
participate in multiemployer pension plans.
  These businesses participate in pension plans that are badly 
underfunded as a result of changes in the trucking industry and poor 
decisions by some of the plans' trustees--decisions that the smaller 
companies had virtually no knowledge of, much less control over. 
Despite the fact that these companies have made every pension 
contribution required of them, the withdrawal liabilities attributable 
to them has skyrocketed, and in several cases exceeds the entire net 
worth of the company by two and three times.
  I worked diligently with my colleagues to include withdrawal 
liability reforms for these companies in the pension bill, and to 
protect those small employers who came forward to voice their opinions 
from retaliation from the pension plan. I am pleased that we were 
successful in securing some modest reforms.
  One additional issue which is vitally important to these employers 
involves the proper interpretation of current law. ERISA section 4225 
provides limitations on withdrawal liability for an employer that 
withdraws from the plan in connection with a bona-fide arms-length sale 
of assets to an unrelated third party. As the interpretation of this 
section has been subject to some legal dispute (Trustees of the 
Amalgamated Insurance Fund v. Geltman Industries, 784 F.2d 926 (9th 
Cir. 1986)), it is important for Congress to reiterate its 
interpretation of this law.
  Therefore, I have included for the Congressional Record a copy of 
PBGC Opinion Letter 93-3. In this opinion letter, PBGC explains that, 
``the plain wording of section 4225 dictates that an employer that 
meets the requirements of both subsections (a) and (b) is entitled to 
an assessment of withdrawal liability that does not exceed the lesser 
of the amounts determined under (a) and (b).'' Further, PBGC says, 
``that neither the legislative purpose nor principles of statutory 
construction compel a contrary conclusion.''
  As the Chairman of the Health Education Labor and Pensions Committee, 
I believe this letter provides a clear and concise interpretation of 
Section 4225 which is completely consistent with the intent of 
Congress.
  The pension reform bill amends the anti-retaliation section of ERISA 
to provide protection for employers who contribute to multiemployer 
plans and others. Specifically, the language adds a new sentence to 
ERISA Section 510 that states: ``In the case of a multiemployer plan, 
it shall be unlawful for the plan sponsor or any other person to 
discriminate against any contributing employer for exercising rights 
under this Act or for giving information or testifying in any inquiry 
or proceeding relating to this Act before Congress.''
  The new sentence is necessary to close a loophole in the existing 
whistleblower protection. Over the course of the debate over 
multiemployer pension reforms, several companies approached Congress 
with concerns about how proposals would adversely affect their business 
operations. In June 2005, John Ward, of Standard Forwarding in East 
Moline, IL, speaking on behalf of those companies, testified before the 
Retirement Security & Aging Subcommittee of the Senate Health, 
Education, Labor & Pensions Committee.
  On several occasions after that date, the committee heard allegations 
of threats of retaliation against Mr. Ward for testifying before 
Congress and for petitioning the Congress for redress of grievances. 
The fact is that Mr. Ward's and the small trucking companies offered a 
dissenting point of view on the proposed multiemployer reforms. The 
other companies for whom Mr. Ward testified are: Fort Transfer of 
Morton, IL; Midwest Drivers of Bloomington, MN; Billings Freight, Inc. 
of Lexington, NC; Miller Transporters of Jackson, MI; Schwerman 
Trucking Co. of Milwaukee, WI; and Steel Warehouse Co., Inc. of South 
Bend, TN. Among those allegations was the concern that all or most of 
the companies had been targeted by a large multiemployer fund.
  The conference committee believes that such actions, if proved, would 
amount to unlawful retaliation under

[[Page S8751]]

the language added to ERISA by the pension reform bill under section 
205. Exercising rights under ERISA, testifying before Congress, and 
giving information in any inquiry or proceeding relating to this Act 
are protected under this provision. Retaliation in the form of threats, 
special audits or singling out of employers and others for adverse or 
disparate treatment, will not be tolerated under the law. Let me say 
that, had there been a conference report, there was an agreement among 
the majority staff to include the specific reference to the small 
companies who warranted protection under this antiretaliation provision 
because they believe they have been singled out for retaliation by one 
of the plans to which they had an obligation to contribute.
  Finally, all of Title II of the pension reform bill, except 
shortening the amortization from 30 to 15 years, is sunset after 
December 31, 2014 although any funding improvement or rehabilitation 
plan is permitted to remain in effect.
  One of my highest priorities for pension reform is clarification of 
the legal status of hybrid pension plans. Since late in 1998 when 
sensational stories about these plans first hit the newspapers, the 
Congress has been struggling over how to respond. I have never doubted 
the legality of hybrid plans. While some conversion practices may have 
been questioned, the plans are entirely valid.
  Hybrid plans have been criticized on the theory that the design was 
per se discriminatory. The theory suggests that the hypothetical 
individual account plan design unlawfully favors younger workers over 
older ones because younger workers could accrue interest on their 
account over a longer period of time than older workers. This theory 
amounts to a declaration that the ``time-value of money'' is age 
discriminatory.
  Not surprisingly, given the confused logic of stating that compound 
interest in a pension plan is age discriminatory, most courts that have 
reviewed the age appropriateness of hybrid plan designs have found them 
to be legitimate. Indeed, the first federal court to review the 
question stated ``Plaintiffs' proposed interpretation would produce 
strange results totally at odds with the intended goal of the OBRA 1986 
pension age discrimination provisions (Eaton v. Onan (S.D. N.Y. 
2000)).'' The case law validating the hybrid design includes three 
federal court decisions issued since a 2003 rogue decision in the 
Southern District of Illinois. These decisions explicitly reject that 
court's reasoning and conclusion (Tootle v. ARINC (D. Md. 2004), 
Register v. PNC (E.D. Pa. 2005) and Hirt v. Equitable (S.D. N. Y. 2006) 
and hold the hybrid pension design to be legal. Consistent with these 
numerous federal court decisions, the Internal Revenue Service (IRS) 
for 15 years issued approvals for individual cash balance plans and the 
Treasury Department and IRS repeatedly issued guidance as to the 
validity of the cash balance design. It is not time for the IRS' self-
imposed moratorium on determination letters for sponsors of these plans 
to end.

  For purposes of applying the age discrimination test, the bill 
permits a plan to express an employee's accrued benefit ``under the 
terms of the plan'' as an account balance or current value of the 
accumulated percentage of the employee's final average compensation. 
This rule was intended to limit, for purposes of age discrimination 
testing, the use of an account balance to cash balance plans and the 
use of a current value to pension equity plans. However, the phrase 
``under the terms of the plan'' could create the impression that the 
rule applies only to cash balance and pension equity plans that define 
in the plan document the term ``accrued benefit'' in this way.
  Many cash balance and pension equity plans define ``accrued benefit'' 
as an age-65 annuity, even though that annuity is determined by 
reference to an account balance or current value. In many cases, this 
definition has been required by the Internal Revenue Service. It is 
important to clarify that Congress does not intend to require a plan 
document to include a specific definition of the term ``accrued 
benefit'' to apply the standard set forth in this legislation.
  This bill sets forth a test for age discrimination in defined benefit 
pension plans that compares an employee's accrued benefit with that of 
any similarly situated younger employee. For this purpose, an 
employee's accrued benefit may be expressed as the current balance in a 
hypothetical account for any plan that determines the employee's 
accrued benefit (or any portion thereof) by reference to a hypothetical 
account, such as a cash balance plan. Similarly, for this purpose, an 
employee's accrued benefit may be expressed as a current value equal to 
an accumulated percentage of the employee's final average pay for any 
plan that determines an employee's accrued benefit (or any portion 
thereof) by reference to such current value, such as a pension equity 
plan.
  But the bill does not elevate form over substance. How a plan 
expresses the accrued benefit for purposes of the age discrimination 
rules is not contingent upon how the plan document defines the term 
``accrued benefit.'' For example, a cash balance plan may, for purposes 
of the age discrimination rules, express the accrued benefit as the 
current balance of the hypothetical account determined under the terms 
of the plan, even if the plan defines the term ``accrued benefit'' in a 
different form, such as an annuity commencing at normal retirement age 
that is based on the hypothetical account.
  Similarly, a pension equity plan may express the accrued benefit as a 
current value equal to an accumulated percentage of the employee's 
final average pay as determined under the terms of the plan, even if 
the plan defines the term ``accrued benefit'' in a different form, such 
as an annuity commencing at normal retirement age that is based on that 
current value. This flexibility is important because pension plans will 
often define the ``accrued benefit'' in different fashions. For 
example, the IRS has frequently insisted that plans define the term 
``accrued benefit'' as ``an annuity commencing at normal retirement 
age'', even though the annuity is determined by reference to a 
hypothetical account or a current value equal to an accumulated 
percentage of an employee's final average pay.
  Any hybrid plan including a cash balance or pension equity plan may 
also apply the age discrimination test by expressing the employee's 
accrued benefit as an annuity beginning at normal retirement age (or at 
the employee's current age, if later), as determined under the terms of 
the plan. If a cash balance or pension equity plan were to do so, it 
likely would rely on the indexing rules elsewhere in section 701 to 
satisfy the age discrimination test.
  The pension reform bill also provides new specifications for hybrid 
plan conversions. These are entirely new requirements and they have 
been worked out among the parties to these discussions. The rule 
specifies that for conversions, plans should follow an ``A + B'' 
formula. This means that the benefit accrued to date under the old 
formula, that was in effect prior to the conversion, must be added to 
the benefit under the new formula beginning on the date the conversion 
takes effect.
  Under this A + B formula, any early retirement subsidy that was 
accrued up to the date of the conversion would be preserved in the 
benefit of the participant. This early retirement benefit would be 
payable only if the participant earned the requisite number of years of 
service to entitle him or her to the benefit subsidy. The participant 
would not be entitled to any additional amount of subsidy, but only the 
amount earned to-date could be paid out and only assuming he or she 
worked the number of years required under the plan to earn it. The new 
rule does not require a plan to pay an early retirement subsidy in lump 
sum unless the plan provides that it will do so. This is consistent 
with current law and practice.
  The hybrid language also corrects the so-called pension whipsaw for 
distributions after the date of enactment. The parties to the pension 
discussions took the view that the position taken by the IRS in Notice 
96-8 was an incorrect interpretation of present law. Many of us who 
were engaged in the pension reform discussions noted that Notice 96-8 
was never finalized by the IRS in their regulations and we observed 
that the Treasury Department had been reviewing the position in Notice 
96-8 for some time, but without result.
  The approach taken in Notice 96-8 can actually harm many 
participants.

[[Page S8752]]

Many employers have reduced the rate of interest crediting under their 
hybrid plans due to concerns that over the requirements of the notice. 
In addition to its other flaws, the approach taken in the notice 
provides a larger benefit to be paid to a participant who takes a 
distribution before normal retirement age than for a participant who 
waits to take his or her benefit distribution. Thus Notice 96-8 would 
penalize an employee who waits to take a distribution. This is a 
perverse result for a rule governing retirement plans.
  As we developed these new rules for hybrid plans, we were cognizant 
that the system is voluntary and as such, it must accommodate the needs 
and concerns of employers and employees. A viable pension system must 
grant plan sponsors the ability to change their plan designs on a 
prospective basis without undue restrictions or mandates on benefit 
levels.
  This legislation is a clarification of the law; the action in 
producing this clarification should not cast any negative inference on 
the legality of the hybrid plans.
  There are provisions in this legislation that I believe bring our 
pension retirement laws into greater sync with our future retirement 
needs for financial education and with the operations of our quickly 
evolving financial markets. One provision concerns the expansion of 
investment advice to workers while other provisions are designed to 
allow ERISA plans to achieve similar benefits and efficiency of our 
modernized financial markets that is available currently to retail and 
other institutional investors.
  The investment advice provisions will provide much needed financial 
advice and guidance for the millions of workers and their families on 
how to invest their hard earned monies for retirement. The compromise 
achieved in the legislation would predicate upon the development of 
computerized models to help workers to investment monies through 401(k) 
accounts. Significant safeguards were put into the legislation to 
ensure that the computerized models were certified by independent third 
parties. In addition, greater auditing of the use of the computerized 
models and enhanced disclosures will ensure that the models are being 
used properly and that workers understand how investment advice should 
be used and how they can still seek independent advice for guidance and 
help.
  Everyone at the conference table recognized the significant 
differences between the operation of 401(k) accounts and IRA accounts. 
While 401(k) accounts within defined contribution plans offer a limited 
menu of investment options, IRA accounts may have hundreds of various 
investment options and alternatives spanning a vast array of 
securities, debt, insurance and other financial products. With respect 
to these IRA accounts, I applaud the measures in the legislation that 
would encourage the development of computerized models to give 
individuals guidance on how to invest their IRA monies. However, I am 
afraid that the type and sophistication of the computerized models for 
IRA's may not be obtainable and that the computerized models presented 
to the Department of Labor for review may be trimmed down to encompass 
only ``life cycle'' type of investment options. This should not be the 
objective. As IRA accounts are different, the regulatory regime for 
giving investment advice guidance should be based upon to overcome the 
real world hurdles in getting appropriate investment advice to 
individuals.
  It also should be noted that the Department of Labor, in 2001, issued 
an advisory opinion to Sun America to provide a structure for providing 
both traditional advice and discretionary management. It was the goal 
and objective of the Members of the Conference to keep this advisory 
opinion intact as well as other pre-existing advisory opinions granted 
by the Department. This legislation does not alter the current or 
future status of the plans and their many participants operating under 
these advisory opinions. Rather, the legislation builds upon these 
advisory opinions and provides alternative means for providing 
investment advice which is protective of the interests of plan 
participants and IRA owners.
  The legislation also contains provisions to modernize ERISA to align 
it with our financial markets of today, not the financial markets of 
1974. These modernizations provisions, such as permitting the use of 
electronic communication networks, will put ERISA plans in parity with 
the current ability of retail and other institutional investors to use 
these modernizations. Specifically with respect to the provision on 
electronic communication networks and similar trading venues, it was 
not the intention to overturn existing interpretations or guidance 
granted by the Department of Labor to securities exchanges registered 
pursuant to the Securities Exchange Act of 1934. The legislation's 
provision is clear that it is applicable solely to electronic 
communication networks and similar trading venues and not to securities 
exchanges. With respect to the block trading provisions, the 
legislation is not intended to be inconsistent with the Department of 
Labor's views with respect to the recently amended prohibited 
transaction exemption, PTE 75-1.
  Should this legislation be enacted into law, I would like to comment 
on the history of pension legislation. The negotiations that have given 
birth to this new law and its place in time have been very difficult, 
but that is by no means unique to the history of ERISA.
  This legislation marks the first major, comprehensive reform of the 
pension funding rules in 32 years. ERISA, itself, was enacted in 1974, 
11 years after the collapse of the Studebaker pension plan in 1963 and 
after extremely heated debates in the House and Senate.

  The first major reform of single-employer rules after ERISA was 
enacted occurred in 1987. Those reforms came only after a long and 
contentious conference. The conference began in March 1987, but it did 
not conclude easily or amicably. It was not until December 22, 1987 
that the legislation was signed into law. The next major reform of 
single-employer plans occurred in 1994, seven more years after the '87 
amendments. That legislation was not enacted until December 8, 1994. 
Multiemployer plans have not been revisited or reformed once since 
their enactment in 1980.
  It seems that pension legislation is marked by disagreement and 
strife, but this should not be the case. There have been times when 
partisanship was put aside and when House and Senate, Republicans and 
Democrats sought to ``do the right thing'' rather than score points.
  One example of that bi-partisan, bi-cameral cooperation is the 
pension provisions of EGTRRA. Those provisions would be made permanent 
by this legislation. EGTRRA made good reforms and I hope they will 
become permanent. They help Americans save for retirement, increase 
portability, protect plan integrity, increase the limits on defined 
benefit, defined contribution plans and IRAs. EGTRRA allows catch-up 
contributions for individuals who are age 50 and older and they make 
permanent many other beneficial tax and ERISA provisions.
  I hope we can return to those days of pension bi-cameral and bi-
partisan cooperation. Given the graying of America and the on-coming 
retirement of the baby-boomers, the American people need Congress to 
enact legislation that will improve the day-to-day lives of ordinary 
Americans. I hope this legislation can and will make modest steps in 
that direction.
  Mr. President, I would like to make a special note about the bill 
before us. This legislation is essentially the product of the 
conference committee of which I chaired. While I am pleased we are on 
the verge of passing an historic measure, I must briefly mention 
concern, as any chairman should, for how we arrived at the bill before 
us today rather than a conference report. It was our intention to make 
final decisions on the very last items of the conference and to report 
back to both the House and the Senate with a completed, bipartisan 
conference report. Unfortunately, the conference process was cut short 
and was taken out of our hands. I truly hope that this is not the start 
of new precedent on how conferences should be conducted. If future 
actions repeat the actions taken here, then the future significance of 
chairmen and conference committees are in severe jeopardy. At the very 
heart of the Congress as a whole and the Senate, are the traditions and 
precedents to ensure that everyone plays by the

[[Page S8753]]

same rules. When those traditions and precedents are usurped, then we 
run the risk of making everything before us meaningless. I offer this 
statement as one of caution and not one of damnation.
  Finally, Mr. President, I want to express my appreciation to the key 
people involved in this bill.
  The pension bill we are about to pass could not have been drafted if 
partisanship and politics had been allowed to intervene. I want to 
thank Senators Kennedy, Grassley and Baucus for their extremely hard 
work on a complex piece of legislation. I appreciate their commitment 
to the private pension system and their willingness to drive onward to 
solutions to the many tough decisions we had to make. It has truly been 
an honor to work so closely with such fine statesmen.
  I also want to thank Senators DeWine and Mikulski for their 
extraordinary work as the leaders of the Subcommittee on Retirement 
Security and Aging. Their hearings last year created the basis for this 
bill. Their commitment to pensions of ordinary Americans and their 
sense of fairness greatly improved the bill before us.
  There are many people who worked behind the scenes to get this bill 
completed. I would like to thank all of my staff for their diligence 
and commitment. In particular I thank:
  HELP Committee Staff Director Katherine McGuire; Greg Dean, who 
played a central role on the investment advice and prohibited 
transactions bill language. He expertly managed discussions throughout 
the process and brought the various players together time and time 
again to move the bill forward; Diann Howland, my pension policy 
director, who bravely agreed to come back to the hill and take on her 
third major pension reform bill. In light of overwhelming odds, she 
brought a fresh perspective to complex issues every day and should be 
commended for her leadership in getting this bill done; David Thompson, 
he brought a superb understanding of the intricate and complex labor 
issues to the table; and Amy Angelier--my crackerjack budget staffer 
and policy advisor. She was on top of each and every aspect of the 
budget aspects of this bill and helped guide its success.
  My staff worked closely with the staffs of my other Senate conferees 
and those individuals deserve thanks. They are Michael Myers, Portia Wu 
and Holly Fechner of Senator Kennedy's HELP Committee staff; Kolan 
Davis, Mark Prater, John O'Neill, Judy Miller and Stu Sirkin on the 
staff of the Finance Committee for Senators Grassley and Baucus. I 
wanted to especially commend Mark Prater for his leadership over the 
last week helping us maneuver through troubled waters.
  I would also like to thank the nonpartisan legislative counsels and 
staff from the Joint Committee on Taxation for their very long hours 
and professionalism. Every person with a pension should join me in 
thanking Jim Fransen, Stacy Kern, Carolyn Smith, Patricia McDermott, 
and Nikole Flax.
  Finally, I want to thank my chief of staff, Flip McConnaughey. He did 
an excellent job holding the office together and keeping a focus on 
Wyoming-specific issues when the pension conference kicked into full 
gear.
  In conclusion, I want to express my appreciation to key people 
involved in this bill over the past 2 years. The pension bill we are 
about to pass could not have been drafted if partisanship and politics 
had not been laid aside for the greater good.
  I thank Senators Kennedy, Grassley, and Baucus for their extremely 
hard work on this complex piece of legislation. I appreciate their 
commitment to the private pension system and their willingness to drive 
onward to solutions to the many tough decisions we had to make. It has 
truly been an honor to work so closely with such fine statesmen. I also 
thank Senators DeWine and Mikulski for their extraordinary work as 
leaders of the Subcommittee on Retirement Security and Aging.
  There are many people who worked behind the scenes to get this bill 
completed. I would like to thank all of my staff for their diligence 
and commitment. I will go into some of those in greater detail later. 
My staff worked with other Senate conferees and other individuals. I 
will mention those after we have the vote so people can be on their 
way.
  I thank the nonpartisan Legislative Counsel's staff, Jim Fransen and 
Stacy Kern. And, finally, I thank my chief of staff, Flip McConnaughey.
  I urge my colleagues to support this historic piece of legislation 
which the President will quickly sign into law. It will save a number 
of pension plans, but, more importantly, it will save the people that 
need these pensions.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, I believe we have 10 minutes on our side. 
I yield myself 7 minutes, and 3 minutes to the Senator from Maryland, 
Ms. Mikulski.
  I know that the hour is late, but I want to take just a few minutes 
to speak on this critical piece of legislation.
  First, I want to thank my colleagues who were instrumental to 
crafting this bill. Pensions are not an easy subject, and it has been 
an extraordinary effort over the last two years to develop this 
compromise legislation, which will help to strengthen retirement 
security of over 100 million Americans.
  I thank our leadership for bringing this important bill to the floor 
today--Senators Frist and Reid. Americans are counting on us to act 
now, and I thank our leaders for making this possible.
  I want to thank Chairman Enzi, who has been both tireless, and also a 
gracious and even-handed leader, both of the HELP Committee and of this 
conference. I also want to thank Chairman Grassley of the Finance 
Committee for his leadership and his integrity in this process.
  And tonight all of us are remembering our good friend and colleague 
Senator Max Baucus, who has worked so hard over the last few years on 
this legislation. Our thoughts are with him and his family and the 
people of Montana in their time of loss.
  Many other Senators also contributed significantly to this 
legislation. Senators DeWine and Mikulski have worked to be sure that 
we address the need of manufacturing companies in this country; Senator 
Mikulski has been particularly interested in women's retirement 
security and protections for older workers, as well. Senator Isakson 
and Senator Lott have continued to press issues important to airlines. 
And Senator Harkin has tirelessly advocated for older workers in cash 
balance pensions.
  There have also been many leaders in the House who made this 
legislation possible. I particularly thank Majority Leader Boehner for 
his contributions and leadership.
  I also thank our staffs, who devoted late nights, gave up vacations 
and weekends to get the bill done and worked steadily on this issue. 
Senator Enzi: Katherine McGuire, Greg Dean, Diann Howland, David 
Thompson, and Ilyse Schuman. Senator Grassley: Kolan Davis, Mark 
Prater, and John O'Neill. Senator Baucus: Russ Sullivan, Pat Heck, Judy 
Miller, and Stu Sirkin. Senator Mikulski: Ellen-Marie Whelan and Ben 
Olinsky. From the Joint Committee on Taxation: Carolyn Smith, Patricia 
McDermott, and Nikole Flax. And from the Senate Legislative Counsel, 
Jim Fransen and Stacy Kern.
  I especially thank my own staff for their tireless efforts: Terri 
Holloway, Jeff Teitz, Jonathan McCracken, and Laura Capps. Michael 
Myers, my staff director, helps guide our work on so many issues. And 
special thanks to Holly Fechner and Portia Wu. Portia brings a mastery 
of the issues and a dedication to workers that made possible so much 
that is in this legislation. And Holly is a true leader who had the 
vision and skills to make it all happen. I thank her for her work on 
this important bill.
  This bill is the most important action to safeguard the retirement of 
hard working Americans in a generation. It will help more than 100 
million Americans today as they look forward to a financially secure 
retirement, and millions more in the future. It means greater 
retirement security for workers across the economic spectrum--from 
cashiers to flight attendants, from construction workers to auto 
workers.
  The danger has been obvious. More and more firms are dropping their 
pensions. Half of all American workers now have no retirement savings 
plan at their job at all.

[[Page S8754]]

  This bill says to millions of Americans who fear their pensions may 
disappear that help is on the way. We're helping their pension plans 
recover and imposing tough new rules to keep them that way.
  It gives workers a greater voice in planning their retirements 
instead of just blind faith. It's their money and their hard work, and 
they should know what's going on.
  This legislation touches almost every aspect of retirement planning, 
whether it's a pension, a 401(k) plan or personal savings. We owe it to 
our workers to give them the best information so they can make the best 
choices for themselves and this bill makes that possible.
  The Pension Protection Act will strengthen the financial health of 
pension plans by doing as much as we can to guarantee that funds will 
be there to pay for employees hard-earned retirement benefits.
  It provides opportunities to increase retirement savings by 
automatically enrolling people in workplace pension plans, and 
improving the Saver's Credit to help moderate-income workers. Workers 
who participate in retirement savings plans will have greater access to 
investment advice to help them manage their retirement savings.
  It protects the retirement benefits of older workers when companies 
switch to new types of cash balance pension plans. And it includes 
specific provisions to strengthen women's retirement security.
  In addition, it includes clear protections to prevent employees from 
being stranded by future Enron-type crises because firms force them to 
invest their retirement savings in company stock.
  The need for action is clear, and it's gratifying that Democrats and 
Republicans, House and Senate, have been able to come together to enact 
these major reforms.
  I urge my colleagues to support this legislation.
  I yield the remainder of my time to the Senator from Maryland.
  The PRESIDING OFFICER. The Senator from Maryland.
  Ms. MIKULSKI. Mr. President, I hope Members take the time to listen 
to what we are saying here. We are about to make history. We are about 
to pass legislation that is going to make a difference. We are going to 
make sure that the lives of over 100 million people will be more secure 
because of what we have done tonight. We are going to make sure that 
good-guy businesses will have clear, certain rules so that they can 
continue to provide pensions. We are going to make sure that 
government, through heavyhandedness or unintended consequences, won't 
force these businesses into bankruptcy. We are going to protect the 
taxpayer to make sure that the pensions of hundreds of thousands of 
people aren't dumped into the Pension Benefit Guarant Corporation, 
leaving it to the taxpayer to do what the private sector should. And we 
succeeded because we worked together.
  I thank Senator Enzi for his leadership and his collegiality, his 
inclusion and his civility; Senator Kennedy for the leadership he 
provided to our side of the aisle and the very competent staff at his 
disposal; certainly to my colleague Senator DeWine. We chaired the 
Subcommittee on Retirement Security and Aging and held some of the 
first hearings out of the box. We tried to go at it with intellectual 
rigor and with fortitude. We promised we would do no harm to those who 
relied on a pension, to those who provided a pension, and to the 
Pension Guaranty.
  Do you know what? We did it. Then we moved it through the HELP 
Committee. The Finance Committee had already started their work, and 
ultimately we merged those two bills. But Senator DeWine and I come 
from a manufacturing base, those blue-collar workers with dirt under 
their fingernails and bad backs who wonder what they are going to have 
at the end of the workday. We stood up for them. There was a concern 
that the use of credit ratings in determining whether a pension plan 
was at risk would force manufacturing companies going through difficult 
economic times into bankruptcy because of their pensions.
  We held up the Senate. We said we wouldn't let the bill go on. But 
Senators Grassley and Baucus reached out to us and said: Trust us; we 
can reach a compromise. Will you work with us? We wanted to know what 
that compromise was. They said: We will have to work it out. Do you 
know what we did? We trusted our colleagues on the Finance Committee 
and before long we had a sensible solution that was actuarially sound, 
fiscally reliable, and also met the needs of the pensions.
  Tonight we come before you with something that we truly have done on 
a bipartisan basis, consulting with experts, working with able staff, 
trusting and working with each other, long hours, difficult nights, 
sometimes speed bumps and potholes. But now we have come to the end of 
the journey. I can't tell you how proud I am to ask my colleagues to 
vote for this bill. I am proud not only because I believe tonight we 
truly can make a difference, but also so we can use this as a model of 
how when we work together, we can do better.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. ENZI. I yield 3 minutes to the Senator from Georgia.
  Mr. ISAKSON. Mr. President, tonight I thank a number of people and 
acknowledge their very hard work: Chairman Mike Enzi of the HELP 
Committee and Ranking Member Kennedy have been indispensable; Senator 
Grassley, who has been fantastic, along with his ranking member Max 
Baucus; John O'Neill of the staff of the Finance Committee; Diann 
Howland and Kara Marchione of the HELP Committee staff; my staff, Ed 
Eigee, Glee Smith and Mike Quiello; and, in particular, Senators 
Coleman and Lott, who have worked so tirelessly to bring us to this 
moment.
  For a second I would like to focus on what this moment is. There are 
three distinct winners tonight. In the short run, the winners are tens 
of thousands of employees in the airline industry confronted within the 
next 30 to 60 days with a loss of up to 70 percent of their pensions 
with them going on the back of the PBGC. They will be grateful for the 
opportunity this bill gives to allow them and their pensions to be 
honored.
  Secondly, in the long run, tens of millions of Americans employed by 
some of the greatest corporations in this country whose pensions have 
come into jeopardy over time because of changes in the workforce, 
changes in longevity, and the pressures that have been put on the 
pension system.
  Most importantly, the big winner tonight is the taxpayers of the 
United States. Because this Congress, in a bipartisan fashion, has come 
together and said: We can modernize our pension laws. We can keep 
pensions from being defaulted upon and going on the back of the PBGC. 
And we can prevent the type of failures that in the past have cost the 
American taxpayers tens of millions of dollars.
  We had an earlier bill that failed tonight. It consolidated many 
efforts to bring about changes for many Americans. But as we close this 
session tonight, with the adoption of this particular piece of 
legislation, we will find the best in this Senate, where Republicans 
and Democrats have come together to do what is right for the taxpayers.
  Lastly, I want to say in particular to the two Senators from Texas 
and the two Senators from Ohio--Mrs. Hutchison, Mr. Cornyn, Mr. 
Voinovich, and Mike DeWine--how much I appreciate their consent for us 
to move tonight and to work with them to see to it that the concerns 
they had are addressed in the months and years ahead.
  I yield the floor.


     Type III supporting organizations and excess business holdings

  Mr. ALLARD. Mr. President, I would like to engage my colleague, the 
distinguished Chairman of the Senate Finance Committee, Senator 
Grassley, regarding a specific point involving the charitable reform 
provisions for Type III supporting organizations, particularly the 
authority of the Secretary to exempt an organization from the 
application of the excess business holdings rules. My colleague has 
worked hard to address the unintended consequences that may arise with 
regard to some of these changes as they related to the important work 
of many fine organizations that support worthy and noble causes. I have 
one of these organizations in my State of Colorado--the

[[Page S8755]]

Reisher Family Foundation--that benefits many underprivileged students 
throughout my State and provides them the means to attend college in my 
State.
  Mr. GRASSLEY. Mr. President, I am happy to engage my distinguished 
colleague about what the intent with this exemption is, and how we have 
worked to limit the unintended consequences for legitimate charitable 
organizations. As you are aware, some of us with interest in this 
provision in working to address any unintended consequences thought it 
would be a good idea to give the Secretary the ability to exempt from 
the excess business holdings rules Type III supporting organizations in 
certain limited circumstances.
  Mr. ALLARD. Mr. President, specifically, I want to draw the 
chairman's attention to the excess business holdings provision and the 
language that allows the Secretary to waive the application of the 
excess business holdings provisions if the holdings of the Type III 
supporting organization are held consistent with the purpose or 
function constituting the basis for its exemption under section 501. I 
want to emphasize that my understanding is correct that the Secretary 
should make a final determination very quickly after a currently 
existing Type III supporting organization seeks exemption from the 
excess business holdings rules. It is extremely important that the 
determination be made within 6 months after the organization seeks 
exemption so that the organization knows how it must structure its 
holdings. Is that my friend's understanding?
  Mr. GRASSLEY. Mr. President, I agree with Senator Allard on his 
understanding and our intent that the Secretary should make a final 
determination very quickly after a currently existing Type III 
supporting organization seeks exemption from the excess business 
holdings rules. The determination should be made by the Secretary 
within 6 months after the exemption is sought. The joint committee will 
have a description of several factors that the Secretary should 
consider in making decisions to waive. The considered views of the 
State Attorney General should be a part of that decision. In addition, 
if the shares of the entity and related persons is not controlling or 
the individual and related persons are bound to ultimately contribute 
all but a de minimus share to the charity and have no direct or 
indirect control of that charity and its investments those are 
additional factors the Secretary can consider.
  Mr. ALLARD. I commend the chairman for his work and for working with 
others, such as the distinguished ranking member on the Senate Finance 
Committee, Senator Baucus, and Senator Santorum on this much needed 
exemption. There is no question that we intend to encourage more 
charitable giving in this country. I thank my colleague for engaging me 
in this colloquy.
  Mr. President, I yield the floor.


                    credit counseling organizations

  Mr. SESSIONS. Mr. President, I want to take a minute to let my 
colleagues know what the chairman of the Finance Committee, Senator 
Coleman, and I have discussed with respect to the consideration of a 
particular section of the Pension Protection Act of 2006--Section 1220. 
Namely, that section would establish additional standards in the 
Internal Revenue Code for tax exemption for credit counseling 
organizations.
  The chairman was the genesis of these provisions, and it is through 
his hard work and persistence that they were ultimately included in the 
bill we are currently considering. The credit counseling reform 
language will go a long way toward ensuring that the hundreds of bona 
fide tax-exempt credit counseling organizations operating today across 
the country that serve an invaluable role in helping consumers 
understand, deal with, and manage their credit and debt problems will 
be able to continue as tax-exempt under Internal Revenue Code Section 
501(c)(3), with all of the important obligations and benefits that this 
status entails. Ensuring the continuation of tax-exempt credit 
counseling organizations that meet the high standards set by the 
Federal Tax Code, along with standards set by state law and by Federal 
agencies such as the Federal Trade Commission and the U.S. Department 
of Justice, will mean that the necessary counseling, education and debt 
management plan services will be available to all financially 
distressed consumers who need them for many years to come. It also 
means that there will be sufficient tax-exempt credit counseling 
organizations available to fulfill the pre-bankruptcy counseling 
mandate of the Bankruptcy Abuse Prevention and Consumer Protection Act 
of 2005. As for the purpose of Section 1220, I would like to turn to my 
colleague, Senator Coleman, who--as chairman of the Permanent 
Subcommittee on Investigations--conducted an investigation into abuses 
in the credit counseling industry.
  Mr. COLEMAN. One provision of Section 1220 of the Pension Protection 
Act of 2006 would create a new Section 501 (q)(2)(A)(ii) of the 
Internal Revenue Code. This particular subsection contains one of 
several new requirements for credit counseling organizations to qualify 
for Federal tax exemption under Internal Revenue Code Section 
501(c)(3). I wanted to clarify with the chairman that this particular 
provision is not intended to impose a limitation on all credit 
counseling organization revenues derived from debt management plans, 
but rather only on the revenues derived from what are commonly referred 
to as ``fair share'' payments from creditors to credit counseling 
agencies. These are payments made by creditors to credit counseling 
organizations that are attributable to the debt management plan 
services provided by credit counseling organizations to consumers whose 
debt is being repaid to the creditors. If the limitation were intended 
to include both ``fair share'' revenues paid by creditors and revenues 
received in the form of debt management plan fees paid by consumers, 
then virtually no existing credit counseling organizations, if any, 
would be able to qualify for tax-exempt status under Internal Revenue 
Code Section 501(c)(3). That is not the intent of Congress.
  Mr. GRASSLEY. Mr. President, yes, the provision is intended to get at 
fair share type payments, but note that agencies and creditors cannot 
get around the provision merely by re-labeling fair share payments as 
something else. This is the intent of this provision. I am also aware 
of a specific issue affecting a few States and their existing State 
law, and the provision before us today specifically includes a 
transition period in part to allow the reconciliation of various State 
statutes with the new federal provision. I will work with interested 
Senators during this period on their concerns regarding existing 
organizations. I thank Mr. Coleman and Mr. Sessions for helping to 
clarify its intent.


                 Modifications to Sections 801 and 803

  Mr. ALLEN. Mr. President, I would like to engage in a brief colloquy 
with the distinguished chairman of the Finance Committee, Senator 
Grassley, regarding changes to the limitations on pension deductions in 
sections 801 and 803. The legislation, in section 801, increases the 
deduction limit for defined benefit plans for years after December 31, 
2005. Increasing this limit will encourage employers to contribute more 
to their defined benefit plans.
  However, if an employer has both a defined benefit plan and a defined 
contribution plan there is a separate deduction limit that applies to 
employers with a combination of plans. Thus, this legislation in 
section 803, also updates the limitation on deductions where an 
employer has a combination of such plans effective for contributions 
made for taxable years after December 31, 2005. The change in section 
803 eliminates the deduction limit for combinations of defined benefit 
and defined contribution plans for employers that do not contribute 
more than 6 percent of compensation to a defined contribution plan.
  If an employer has a combination of plans and wants to contribute 
more than 6 percent of compensation to a defined contribution plan, the 
legislation also has a provision in section 801 which permits employers 
to exclude defined benefit plans whose benefits are guaranteed by the 
PBGC, from the limits applicable to combinations of defined benefit 
plans and defined contribution plans. But, unlike the other two 
provisions I described above which permit employers to increase their 
contributions to defined benefit plans

[[Page S8756]]

effective for years after December 31, 2005, it appears that this last 
related provision regarding guaranteed plans may inadvertently not have 
the same effective date as the other two.
  It seems to me that if we are encouraging employers to fully fund 
their defined benefit pension plans, that the effective dates for these 
provisions should all be effective as of December 31, 2005. I am 
hopeful that we will examine this issue and can correct this technical 
oversight.
  Mr. GRASSLEY. Mr. President, I appreciate my distinguished colleague 
from Virginia, Senator Allen, raising this concern. I can assure him 
that he is correct that it makes perfect sense for provisions intended 
to encourage employers to fund their defined benefit pension plans by 
increasing the deduction limits to have the same effective date. I also 
agree that this should especially be true for provisions that update 
deduction limits for employers with a combination of plans. I look 
forward to working with my colleague on addressing this oversight.
  Mr. ALLEN. Mr. President, I thank the distinguished chairman of the 
Finance Committee for his willingness to work with me to address this 
issue.


                              section 701

  Mr. BURR. Mr. President, I would like to ask the chairman of the 
Committee on Health, Education, Labor, and Pensions a question 
regarding how section 701 of the new bill relates to capital 
preservation and loss protection. Would you please explain what types 
of plans are subject to each of the two rules and how the rules 
operate?
  Mr. ENZI. The capital preservation rule applies to applicable defined 
benefit plans, such as cash balance and pension equity plans. To 
illustrate how the rule operates in the case of a cash balance plan, 
the rule requires that the cumulative effect of all the interest 
credits to an employee's hypothetical account may not reduce the 
account balance below the sum of all the pay credits made to the 
account.
  Mr. BURR. The bill refers to ``contributions credited to the 
account'' rather than pay credits?
  Mr. ENZI. Yes. The two terms are synonymous. Since the account in a 
cash balance plan is hypothetical, the contributions credited to it are 
hypothetical also. Hypothetical contributions is merely another name 
for pay credits.
  The second rule, the loss protection rule, applies to all defined 
benefit plans that use any form of benefit indexing. Thus, the second 
rule applies not only to cash balance and pension equity plans but also 
to other defined benefit plans that index benefits.
  The loss prevention rule would apply in the same way as the capital 
preservation rule in the above example of a cash balance plan. However, 
because the loss prevention rule applies to a broader group of plans 
than just applicable defined benefit plans, the rule is written in more 
general terms than the capital preservation rule, which applies to a 
narrower universe of plans.
  To illustrate how the loss protection rule operates in the case of a 
defined benefit plan that indexes benefits by reference to changes in 
the Consumer Price Index, the rule requires that the cumulative effect 
of such indexing may not cause a decrease in an employee's benefit 
below what it would have been in the absence of such indexing. Although 
it is very unlikely, this would occur if there were a sustained period 
of deflation in which the overall change in the CPI were negative 
rather than positive. In that extremely unlikely case, the plan could 
not reflect the cumulative negative change in the CPI.
  Mr. BURR. At what point are the rules applied?
  Mr. ENZI. The capital preservation and loss protection rules are 
intended to provide long-term protection to employees, so the 
determination of whether the rules are satisfied is made at the time 
benefits commence but not beforehand. In the case of plans that index 
benefits after benefits begin, the determination is made by reference 
to the benefit in effect at the time benefits begin.


                  lump sums from hybrid pension plans

  Mr. GREGG. Mr. President, I would like to ask the chairman of the 
Committee on Health, Education, Labor, and Pensions, to clarify 
provisions of H.R. 4 that address the payment of lump sums from hybrid 
pension plans.
  My first question relates to a clarification of the effective date of 
those provisions. As you are aware, under the so-called whipsaw method 
of calculating lump sums, younger workers would receive much larger 
lump sums than identically situated older workers.
  This result is one that Congress never intended. Furthermore, the 
practical effect of the whipsaw calculation would be to reduce benefits 
for all participants, young and old, in cash balance plans. Therefore, 
the intent of the whipsaw provisions is to put this issue to rest. 
Accordingly, the provisions are effective for distributions made after 
the date of enactment, regardless of why they are made.
  Mr. ENZI. Yes. The provisions do apply to all distributions made 
after the date of enactment.
  Mr. GREGG. My second question relates to the definition of ``market 
rate of return'' in the whipsaw provisions. My understanding is that 
the term ``market rate of return'' is intended to allow plans to adjust 
benefits in ways that benefit participants. For example, a plan could 
provide a variable market rate of return and, in addition, protect 
participants by preventing the rate of return in their accounts from 
falling below a reasonable, minimum level without having to reduce the 
variable market rate of return. My further understanding is that the 
term ``market rate of return'' is intended to include a fixed rate of 
interest that is no greater than the yield on long-term, investment-
grade corporate bonds at any time during a reasonable period before the 
rate is first applied under the plan; is this correct?
  Mr. ENZI. Yes, it is.


                           credit counseling

  Mr. BINGAMAN. Mr. President, I would like to engage in a brief 
colloquy with the distinguished chairman of the Finance Committee, 
Senator Grassley, regarding the provision addressing tax-exempt credit 
counseling organizations. My understanding is that the provision is 
intended to strengthen the standards for credit counseling 
organizations claiming exempt status, helping to ensure that these 
organizations do not conduct substantial activities unrelated to their 
exempt purposes of providing charitable and educational counseling. I 
would ask Chairman Grassley to confirm that understanding and to 
briefly explain the intent of the provision.
  Mr. GRASSLEY. I am happy to confirm the understanding of my 
distinguished colleague from New Mexico, Senator Bingaman, regarding 
this provision. The provision is intended to buttress current exemption 
standards by providing additional standards that must be met for a 
credit counseling organization to claim exempt status. As the Senator 
knows, the IRS recently has challenged the exempt status of several 
credit counseling organizations because they are operated for a 
substantial non-exempt purpose, substantial private benefit and private 
inurement. Certain of these organizations exist merely to generate 
income from the sale of debt management plans, while providing minimal 
exempt purpose activities related to credit counseling. The standards 
imposed under this provision are intended to augment, not supplant, the 
IRS efforts and to ensure that exemption from consumer protection laws 
applies only to those organizations that can satisfy stricter tax-
exempt standards. I also want to assure the distinguished Senator from 
New Mexico that we will continue to monitor developments in this 
industry to ensure that only those entities that serve a sufficient 
charitable and educational purpose can claim tax-exempt status and that 
such tax-exempt entities do not generate significant revenues from 
activities unrelated to their exempt purposes. If it turns out that the 
additional standards imposed by this legislation do not have the 
desired impact, you can be assured that we will not hesitate to revisit 
this area.
  Mr. BINGAMAN. I want to thank the distinguished chairman of the 
Finance Committee for his clarification and his leadership on these 
important issues.


                          relief for airlines

  Mr. NELSON of Florida. Mr. President, while we consider legislation 
regarding the hard-earned pension benefits of American workers, we have 
before us a good bill, but flawed bill,

[[Page S8757]]

which is long overdue. It strengthens company pension plans and ensures 
that money promised is there to pay for millions of workers' and 
retirees' benefits. It also enhances retirement savings and retirement 
security by encouraging more companies to use automatic enrollment in 
401(k) pension plans, which ensures workers save more for retirement.
  Yet despite these positive steps and necessary reforms, I have grave 
reservations over the inequities contained in the airline relief 
portion of the bill.
  We are not here to pick winners and losers in certain industries, yet 
the differential treatment contained in this legislation would offer 
one company an unfair advantage over another. Last year's Senate-passed 
bill contained equitable relief for all, which is the correct approach, 
and I am appreciative of the work the Senate Finance and the Health, 
Labor, Education and Pensions Committees put into that effort. This 
House-passed bill takes a different approach and deals a better hand to 
some at the expense of others.
  It is not my intention to delay or hold up the bill because of this 
provision, but I am seeking assurances for the 13,475 American Airlines 
workers and retirees in Florida who are counting on us to make changes, 
in whatever way possible, that will put them on equal footing.
  Mr. DURBIN. Mr. President, although I will support final passage of 
the long-awaited pension bill that aims to strengthen millions of 
workers' pensions, including those for airline workers, I want to 
express my concerns regarding one provision in particular. Similar to 
the Senate pension bill passed in October, this measure contains 
language that would provide financially troubled airlines more time to 
pay out their pension obligations and preserve their employees' pension 
plans. However, while the Senate-passed language was carefully crafted 
in such a way so as to not pick winners and losers between those 
airlines in bankruptcy that are freezing their defined benefit plans 
and those who have not entered bankruptcy and are intent on keeping 
their defined benefit plans, the House-passed language that we are soon 
to consider does pick winners and losers. The House measure gives those 
airlines that want to keep their defined benefit plans a much more 
unattractive interest rate than those airlines that freeze their plans. 
It is simply not fair to penalize those airlines that want to keep 
their pension plans.

  It distresses me that those airlines that choose to keep their 
defined benefit plans will be punished and forced to compete on an 
uneven playing field. In June, concerned with the pensions of over 
10,000 American Airlines' employees in my State and thousands of others 
across the Nation, I joined with Senator Obama and my fellow Senators 
from Oklahoma and Florida in sending a letter to the pension conferees 
reminding them of the importance of providing airline relief and 
treating all airlines equally. Unfortunately, this bill does not treat 
all airlines equally.
  In talking to my colleagues in the Senate, I believe there is a 
general consensus that this differential should be corrected at the 
earliest possible legislative opportunity. If that assurance can be 
given by the Senate leaders on this pension legislation, I believe we 
should pass the House bill this week and work diligently to correct the 
inequity upon our return in September.
  Mr. OBAMA. Mr. President, this is not a perfect bill. No 900-page 
bill could be. But it will push companies to stay true to the promises 
of retirement security that they have made to their employees. We have 
seen too many people hurt at companies that have gone through 
bankruptcy and dumped their pensions on the PBGC. We have also seen 
companies like Enron that misled their workers into putting all their 
retirement savings into employer stock. This bill takes steps to reduce 
the incentives and capacity for firms to take either of those courses 
of action.
  But as I said, the bill is not perfect. Among the areas that could 
have used additional work is the disparate treatment among competitors 
contained in the airline relief portion of the bill.
  The Senate-passed bill contained comparable relief for all airlines 
in an effort to keep from distorting the marketplace against or in 
favor of any one or two airlines. That was the correct approach. The 
House-passed bill treats different airlines differently and will 
distort the market in a way that is unnecessary and unfair to the 
10,000 American Airlines workers and retirees in Illinois. Both as a 
matter of retirement policy and aviation policy, this bill should not 
favor one airline over another, and I join my colleagues who are 
calling for parity or near parity in treatment.
  Mr. REID. Mr. President, I am glad that we are finally getting to the 
point where we can finish this very important pension reform 
legislation. It contains a number of measures that will improve the 
retirement security for millions of Americans.
  One of the things that this bill does is provide targeted funding 
relief to the airline industry--an industry that was devastated by the 
events of September 11. In crafting the airline relief in the Senate 
bill, the managers struck the appropriate balance, being careful not to 
favor one group of companies over another. That balance is not 
reflected in the airline relief proposal that the House inserted into 
this bill at the last minute. Ironically, those airlines, like 
American, that want to keep their pension plans for their workers get a 
much less favorable interest rate and a shorter amortization period. As 
a result, those airlines that have done the right thing for their 
workers are penalized relative to those airlines that have opted to 
freeze their pension plans. That makes absolutely no sense.
  While I agree with my colleagues that the pension reform bill should 
move forward this evening, I also strongly support their efforts to fix 
this portion of the bill in the very near future.
  Mr. LAUTENBERG. Mr. President, this pension bill is a good bill, but 
it is not a perfect bill. It will make sure companies put real money 
behind their pension promises, in good times and bad. It will give 
workers more information about their pension plans so they understand 
the risks they face. It will create incentives to encourage more 
workers to save for their retirement.
  Unfortunately, the bill is not fair to all airlines. The bill gives 
advantages for some carriers at the expense of others--especially 
disadvantaging those in New Jersey. As a result of this bill, some 
airlines will have to contribute hundreds of millions of dollars more 
to their pensions than others. That isn't fair, and it doesn't create a 
level competitive playing field.
  The Senate agreed that this isn't fair, and that is why the Senate's 
version of airline relief treated all airlines equally. If the House 
Republican conferees had not hijacked this conference, I believe we 
wouldn't be in this position. But we have been put in a very difficult 
place. We are forced to choose between stopping this bill and 
endangering pensions for hundreds of thousands of workers and accepting 
an outcome that is blatantly unfair.
  I hope and expect that when this bill passes, we will be able to work 
together to fix this problem at the first opportunity.
  Mr. MENENDEZ. Mr. President, as we consider critical pension reform 
to help secure the retirement benefits of millions of our Nation's 
workers, I want first to commend my colleagues for all the hard work 
they have put into this bill and their efforts to strengthen our 
Nation's pension system. This bill will help ensure that companies can 
continue to provide pensions over the long term, it will protect the 
benefits of current beneficiaries, and it strengthens plans so that 
benefits will be there for workers for years to come.
  And while I welcome this bipartisan bill and all that it will do to 
benefit the retirement security of workers, I would like to express my 
strong concern over the differential treatment of airlines in this 
bill. In allocating that relief, not all airlines are treated fairly, 
and therefore not on a level playing field. Some, such as Continental 
which has a significant economic and employee presence in New Jersey, 
are not given the same benefits and flexibility to make up the 
underfunding of their pension plans. What especially concerns me is 
that Continental went to great lengths to keep it from becoming 
financially unstable and to protect benefits for its employees, 
including voluntary wage reductions and freezing one of its pension 
plans. And despite those actions, because of the unequal treatment in 
this bill, the airline is at a competitive disadvantage, and over

[[Page S8758]]

10,000 workers in my state could be adversely affected.
  As this legislation has been under negotiation for months and there 
is an urgency to pass a final bill, I do not want to hold up the 
pension bill from final passage. I do hope, however, that we can secure 
the support of our leadership and work with our colleagues to come to 
an agreement that would provide more equitable treatment for 
Continental Airlines and its employees. Retirement security is a 
pressing issue for many workers affected by this bill, including 
employees at Continental. Therefore, I urge my colleagues to work with 
us in addressing this issue when we return in September.
  Mr. HARKIN. Mr. President, I do not believe that the pension bill 
should treat different, very competitive companies within the airline 
industry in the very disparate manner that it does. This was an 
unresolved issue in the pension conference when the House leaders 
decided not to complete the negotiations and instead sent us the 
measure before us. While I understand that an amendment tonight is not 
going to happen, I do believe that the Senate move to and insist that 
this wrong be fixed.


                         airline pension reform

  Mrs. HUTCHINSON. Mr. President, I rise to engage the majority leader 
in colloquy related to H.R. 4, the Pension Protection Act. Senator 
Talent has asked that I state for the information of our colleagues 
that he shares my concern in regard to the issue I am raising.
  I support the efforts being made to reform and update our Nation's 
outdated pension laws and to protect the taxpayers by reducing the 
threat of insolvency on the part of the Pension Benefit Guaranty 
Corporation. But there is a section in the bill that is not equitable; 
it favors two airline companies over two others; and that must be 
remedied.
  The bill affects the pension plans of four competing airline 
companies--American, Continental, Delta and Northwest. Two of these 
companies, Delta and Northwest, are currently operating in bankruptcy; 
American and Continental are not. When the Senate passed its version of 
the pension reform bill these four companies were treated equally. Our 
bill did not favor one over the other nor include provisions that would 
tilt the competitive playing field to the advantage of one or more of 
the companies.
  But the legislation that has been sent to us by the House of 
Representatives unfortunately contains that type of unfair provision. 
The House bill allows Delta and Northwest to use an interest rate of 
8.85 percent to calculate returns from pension assets and determine the 
amount of money that the companies must contribute each year to their 
pension plans to make up for unfunded liabilities. But the interest 
rate allowed to be used by American and Continental is not 8.85 
percent. It is not 8 percent. It is not even 7 percent. These two 
companies must use the corporate bond yield, which is now about 6.2 
percent.
  Translated into dollars-and competitive advantage--the difference 
between 8.85 percent and 6.2 percent means that the annual payment of 
American and Continental could be hundreds of millions of dollars more 
than the payment due from Delta and Northwest, quickly mounting into 
the billions. I say to the majority leader that that is an inequity 
that must be removed. I am not arguing that the percentage used for 
Delta and Northwest be reduced or changed in any way. But I am arguing 
that the disparity between 8.85 percent and 6.2 percent is far too 
great and provides an unjust competitive advantage for Delta and 
Northwest. Is the leader able to provide any insight on his view of 
when and how the Senate would have an opportunity to address this 
issue?
  Mr. VOINOVICH. I certainly endorse the comments of the Senator from 
Texas. The airline industry is very competitive with thin profit 
margins. The costs of labor and benefits are two of the few variables 
that affect a company's bottom line. The bill that came over to the 
Senate from the House, and which we are unable to amend today, puts 
several of the airlines at a severe competitive disadvantage because it 
does not apply the same rules to each airline's pension fund. 
Recognizing the importance of the other reform measures in this 
legislation, I understand the need to pass it and send it to the 
President for his signature. But before we do that, I would like to 
hear from the majority leader if he believes that he will be in a 
position before the year ends to revisit this question and help us 
reach a more equitable resolution.
  Mr. DeWINE. I want to echo the comments of my colleagues. As the 
chairman of the HELP Subcommittee on Retirement Security and Aging, I 
have been working on pension reform legislation for the last year and a 
half. I believe it is essential that the Senate pass legislation this 
week that will strengthen defined benefit and multiemployer plans and 
that will encourage retirement savings by making the retirement 
provisions of EGTTRA permanent. And while I view this bill as an 
improvement over the bill the Senate passed last fall, with the 
elimination of the provision that used credit rating to determine at-
risk funding status, I believe that this bill's airline relief 
provisions are greatly inferior to those of the Senate-passed bill. As 
my colleagues who spoke before me made clear, this is unacceptable and 
will need to be fixed when we return from the August recess.
  Mr. CORNYN. I join my colleagues from Ohio and the senior Senator 
from Texas in their comments regarding H.R. 4, the Pension Protection 
Act. While providing the airline industry with relief, this bill does 
so unevenly and undercuts the ability of Continental Airlines and 
American Airlines to compete in a global economy. These Texas airlines 
have neither frozen their pension plans nor filed for bankruptcy. As 
Senator Voinovich stated, the airline industry operates on thin profit 
margins and disadvantaging two profitable airlines has ramifications 
not only for the airline industry, but also for consumers and airline 
employees. I believe it is crucial that Congress revisits this issue 
and provides more equitable relief for all airlines and not just a few.
  Mr. INHOFE. I, too, want to echo the comments of my colleagues. I 
share their concern in regard to the issue that they have raised.
  Mr. FRIST. I appreciate the comments of my colleagues. This pension 
bill--while not technically a conference report--essentially represents 
the bipartisan and bicameral agreement reached by House and Senate 
pension conferees after many months of negotiation. I am aware of the 
Senators' concern about the interest rate issue; I have had other 
Senators approach me as well.
  Although we are not in a position to amend the bill before us, I can 
promise the Senators that I will continue to work with them on this 
issue after we return from the August recess. Until the Senate has had 
an opportunity to more fully examine the issues involved in this 
complex matter, we should consider it an issue that requires further 
discussion. As such, I think this issue needs to be reviewed further 
this year to assure an equitable result, recognizing of course that the 
House would have to agree to any changes we might propose.
  Mrs. HUTCHISON. I thank the leader for his comments and his offer of 
assistance. I am told that the House majority leadership is aware of 
this matter and has given a commitment to work with interested 
colleagues to reach a resolution that assures no bias on the part of 
Congress toward any of the four airlines involved in this issue.
  Mr. FEINGOLD. Mr. President, I will vote against the Pension 
Protection Act. While there are many constructive provisions in the 
bill, the package is deeply flawed in at least two respects. First, it 
will add to our already massive government debt. Thanks in large part 
to the expensive tax provisions that were added, the legislation will 
add another $66 billion over the next 10 years to the already massive 
debt with which we are burdening our children and grandchildren. To add 
insult to that injury, most of that cost stems from savings incentive 
provisions that overwhelmingly benefit those who least need it. The 
provisions that raise the contribution limits on tax-preferred savings 
accounts benefit only 1 in 16 households, and only 1 in 100 households 
with incomes under $50,000. If we want to encourage more savings, and 
we should, there are far better ways to do it.
  The second matter that raises significant concerns is the so-called 
red zone

[[Page S8759]]

provision which permits pension plans to cut the vested pension 
benefits of workers. Allowing a worker's vested benefits to be cut is 
unprecedented and grossly unfair. If workers are told that they may 
take early retirement at a certain level of earned pension, that 
promise should not be broken. But under this bill, the financial future 
on which some families were planning can now come crashing down on 
them. Retirement benefits which were promised to them and on which they 
were relying may now be taken away. And make no mistake; if Congress 
permits earned benefits to be taken, they will be taken.
  There is a clear need for pension reform, and many of the provisions 
in this bill make sense. But I cannot vote for a measure that is so 
irresponsible for the fiscal future of our Nation and the personal 
economies of thousands of workers who will soon retire.
  Mr. HATCH. Mr. President, the Pension Protection Act of 2006 has been 
a long time coming. In the Senate, the Health, Education, Labor, and 
Pensions Committee and the Finance Committee reported pension 
legislation last year. The full Senate passed pension legislation in 
November of 2005, The House passed pension legislation in December of 
2005.
  We had to reconcile those bills, which was no small achievement, and 
then we had to consider the real concerns that some of our colleagues 
had about the impact of this bill in their States. But we got it done.
  We had our differences, but ultimately we agreed more than we 
disagreed. We understood the fundamental problem and sought to solve it 
through genuine bipartisan negotiations. We saw that our defined 
benefit pension system was in dire straits. Too many companies had 
severely underfunded pension plans. Companies had made promises to 
their employees, promises that those employees were depending on for 
their retirement. But the companies were falling short on those 
promises.
  This was not good for the bottom-line of the Pension Benefit Guaranty 
Corporation, PBGC, which is now, as the result of several high profile 
bankruptcies, running at a considerable deficit. This was not good for 
employees, who in the event of plan termination would receive dimes on 
the dollar for their pension plans. And ultimately, it was not good for 
the American people, who might have been stuck holding the bag if the 
PBGC was unable to meet its obligations.
  We had to act to fix this. We had to ensure that companies were 
putting their money where their mouths were. If they made pension 
promises, they had to keep them, They had to fund their plans.
  And this bill requires them to do just that.
  It was not easy.
  The conference committee assembled to reconcile House and Senate 
differences was incredibly unwieldy. We had multiple chairmen involved 
in both the House and the Senate. It was an important enough issue for 
American workers, American taxpayers, and the American economy that 
leadership from both the House and the Senate were involved in the 
negotiations. Not only Republicans and Democrats, but even the House 
and the Senate, did not see eye to eye on all of the issues. And our 
decisions would impact the business plans of some of our country's 
greatest corporations, the future of the defined benefit pension 
system, and the future retirement of American workers.
  But we did it. The final result of all these negotiations is a good 
bill.
  In short, we are going to require companies to fund 100 percent of 
their pension liabilities. This makes sense. Under current law, they 
are only required to fund 90 percent of their liabilities. I think that 
it makes sense to most Americans that if you make a promise, you should 
keep that promise, and companies should be funding the plans that they 
have promised to their employees.
  At the same time, we recognize that these new obligations could prove 
a hardship for many. So we have allowed companies with underfunded 
plans 7 years to make up their pension shortfalls. And for the 
financially struggling airlines, the opportunity to make up for their 
pension underfunding will be extended from ten to seventeen years.

  And we are going to severely curtail the practice of promising new 
benefits for tomorrow when you cannot even keep the promises you have 
already made. Employers with pension plans less than 80 percent funded 
will not be able to promise future additional benefits unless the 
earlier benefits are paid for.
  We shore up the multi-employer plans, which have unique funding 
problems.
  We provide legal clarity to hybrid ``cash balance'' plans that have 
elements of both defined benefit and defined contribution plans.
  Firms that administer 401(k) plans for their employers will be able 
to provide investment advice to employees, so long as that advice is 
based on an independently certified and audited computer model.
  And to encourage personal saving for retirement, this bill will allow 
companies to automatically enroll workers in 401(k) plans.
  This bill makes several tax incentives that encourage retirement 
savings permanent. Most importantly, Americans can remain confident 
that they will be able to rely on the increased 401(k) and IRA 
contribution limits established in 2001 and scheduled to expire in 
2010.
  This is not a perfect bill. But it is a real achievement.
  Not only our pension system, but our entire retirement system, will 
be better off as a result of it.
  And I want to congratulate my colleague and fellow conferee, Chairman 
Enzi, for being able to bring everyone together in the end. I want to 
thank my colleague and fellow conferee, Chairman Grassley, for his 
persistence.
  Our pension system was broken. Critics might complain that nothing 
gets done in Washington, but our pension system is busted, and tonight, 
through tough bipartisan and bicameral work, we went a long way towards 
fixing it.
  It is late in an election year, and it says a good deal about our 
country that we could put our differences aside and tackle this 
important issue.
  The lives of American retirees, and the health of American industry, 
will be better as a result.
  Mr. Akaka. Mr. President, today I will vote not against pension 
reform but against the unfair tactics being used by the majority 
leadership in Congress. As a representative of my State of Hawaii, I 
must ensure that the voices of the people of Hawaii are heard and that 
their rights are not infringed upon or forgotten. This is an important 
distinction to make at this time because the vote that I cast today is 
in support of the rights of every member in Congress and the people 
they represent.
  It is my understanding that the House and Senate conferees were close 
to an agreement on the conference report to H.R. 2830, the Pension 
Protection Act of 2005, but without notification, the House leadership 
introduced H.R. 4. While this measure does include many of the 
decisions made by the conferees, and is in some cases an improvement 
from the measures passed by the House and Senate, I must vehemently 
object to the process that the House leadership used. In looking to our 
future, I must ensure that the process we follow in the Congress does 
not negate the voices of the minority.
  When the House leadership introduced H.R. 4 and then called for a 
vote on the measure, they sent a loud and clear message on how future 
measures may be considered by Congress. Supporting such a process would 
allow the majority to believe that they do not have to listen to 
anyone's concern. Rather than negotiating on legislation with all the 
conferees in order to amicably resolve any differences, we find 
ourselves looking from the outside in. This is no way in which to 
ensure that the ideals and beliefs for all will be given the due 
process of consideration that everyone deserves.
  For these reasons, I am voting against H.R. 4, again, not because I 
am against pension reform and ensuring that working men and women 
retain their benefits and pensions, but against the majority 
leadership's efforts to nullify our voices. I believe that the 
conferees to H.R. 2830 were close to an agreement and should have been 
allowed to complete action to develop a true compromise piece of 
legislation.
  Mr. CHAMBLISS. Mr. President, I rise today in support of the Pension

[[Page S8760]]

Protection Act. This has been a long process, but I am glad we were 
able to produce a bill that provides retirement security to millions of 
Americans while at the same time protects the taxpayers. These reforms 
provide tough rules to ensure that employers will keep their pension 
promises.
  I would like to thank my colleague from Georgia, Senator Isakson, for 
all his hard work throughout this process. I appreciate it, and I know 
the folks back in Georgia appreciate it.
  Many companies and their employees in my home State of Georgia 
support this legislation and will benefit from its provisions. For 
example, Kroger has grocery stores all over Georgia and employs 18,000 
folks across the State, who are depending on their pensions when they 
retire. General Motors also has a large presence in Georgia with almost 
14,000 retirees and 3,500 employees, many of whom are covered by a 
defined benefit pension plan. The United Parcel Service, UPS, is 
headquartered in Atlanta, GA, and over 127,000 of its employees 
participate in multiemployer pension plans.
  The airline industry in particular has taken some economic hits over 
the years, and I am pleased that Congress was able to provide critical 
provisions for the airlines, ensuring that they will get the time they 
need to fulfill their pension obligations.
  Delta Airlines is headquartered in Georgia, and has a longstanding 
history of service to passengers throughout the world and has been an 
exemplary corporate citizen. Like many other hard-working Americans, 
Delta's some 91,000 employees and retirees have devoted years of work 
and time to their employer.
  While our airlines are in a unique situation, many of them like Delta 
maintain a strong commitment to keep the pension promises they made to 
their employees and retirees.
  I would like to close by reiterating why we are here today: American 
workers deserve to know their pensions will be there when they retire. 
With the passage of this conference report, we can ease the fears of 
millions of employees and retirees by taking the steps necessary to 
help ensure that pension promises will be kept and employers, not the 
taxpayers, will be held accountable.
  Mr. KOHL. Mr. President, I rise in support of H.R. 4, the Pension 
Protection Act. This bill is not a conference report, and I am troubled 
by the way that the House circumvented the process and endangered swift 
enactment of this important legislation. However, the bill that will 
soon be before the Senate does reflect the carefully negotiated 
agreement of the conferees and enjoys broad bipartisan support.
  Our goal is to strengthen traditional pensions, which have been an 
important source of retirement income for hard-working Americans. 
Unfortunately, these pensions have been on the decline, as companies 
replace them with 401(k)s that shift risk to individual workers and 
generally do not guarantee retirement income for life. We must ensure 
that traditional pensions remain a viable option for companies and at 
the same time ensure that companies keep their promises and do not dump 
their plans on the Government at taxpayer expense.
  This compromise strikes the right balance of requiring companies to 
contribute enough to their pension plans, without discouraging them 
from maintaining their plans. The bill enacts the commonsense 
requirement that companies must fully fund their plans, so that they 
can keep their promises to the 34 million workers and retirees who rely 
on their hard-earned benefits. It allows companies to put in more money 
when times are good. It also provides relief to Delta and Northwest, 
who have said that they will be forced to dump their plans if Congress 
does not enact this bill soon.
  Aside from reforming traditional pensions, the bill also includes 
important provisions to boost retirement savings. Most importantly, it 
improves and makes permanent the saver's credit, which helps low- and 
moderate-income workers save. It encourages companies to automatically 
enroll workers in 401(k) plans and makes pensions more portable. And it 
provides protections to workers in the wake of the Enron accounting 
scandal.
  While this bill is not perfect, I believe that it will go a long way 
toward improving the retirement security of all Americans, and I 
therefore support its enactment.
  Mr. LEVIN. Mr. President, last November I cast one of only two votes 
against the Senate's version of pension reform. One of my primary 
concerns with that bill was that companies trying to do right by their 
workers would be unfairly penalized. I was concerned that on balance, 
that bill did more to drive companies away from offering guaranteed 
benefit pension plans than it did to strengthen the system. But the 
bill before us today is much improved, and I will support it.
  Let me state upfront that it is through a highly unusual maneuver 
that we are taking up this issue in the form of a new bill sent over 
from the House last week rather than as a final House-Senate conference 
report. As part of their ongoing efforts to ram through a reckless 
near-repeal of the estate tax, House Republicans hi-jacked the pension 
conference process to remove a package of widely supported tax breaks 
so they could be paired up with their estate tax proposal in another 
bill. The abuse of process involved in that maneuver is serious.
  But regardless of political games, defined-benefit pensions are 
facing a crisis today and reforms are needed to make sure that retirees 
receive the benefits they were promised. We need to make sure that 
companies are required to adequately back up the promises they have 
made to their workers. At the same time, we should make sure that 
reforms are designed to encourage the recovery and strengthening, 
rather than the termination, of underfunded and vulnerable pension 
plans.
  Striking this delicate balance is not easy. I am pleased that two 
misguided provisions from the Senate bill were dropped in the 
conference negotiations that are reflected in this bill. The first of 
those two provisions would have required companies with solid pension 
plans but who also had poor credit ratings to use actuarial assumptions 
that require them to put away unnecessarily high amounts of money into 
their pension trusts. I am glad that this bill uses a more direct 
measure of a pension plan's financial health to determine whether 
additional money needs to be put into the plan.
  The second provision of concern dealt with an actuarial method known 
as ``smoothing.'' Under current law, the amount of money companies are 
required to put into their pension plans is determined by using a four-
year weighted average of the values of pension assets and/or 
liabilities. The Senate bill would have shortened smoothing to 12 
months, which would have added significant volatility for companies 
when they are determining how much money they need to set aside for the 
pension plans. The bill before us today changes smoothing to a 2-year 
time period. I would have preferred the 3-year average proposed in the 
original House bill, but the 2 years in today's bill is an obvious 
improvement over the Senate's original 1 year.
  Based on my concerns with these credit rating and smoothing 
provisions, Senator Voinovich and I wrote a letter to the House-Senate 
pension bill conference committee members, urging them to consider the 
potentially adverse impact these provisions could have on companies 
that offer defined benefit pension plans and the employees and retirees 
who are counting on the stable pensions they have been promised. I was 
pleased that one-third of the Senate joined us in signing this letter, 
and I appreciate the conferees addressing our concerns.
  I am also pleased that this bill, like the Senate bill, will give 
airlines extra time to fund their pension obligations. I am told that 
this action means that Northwest and Delta will keep their plans when 
they emerge from bankruptcy, rather than turning their obligations over 
to the Government's pension insurer, the Pension Benefit Guaranty 
Corporation, PBGC. Passing the airline provision is a win-win. The 
companies should now not dump their plans on the Government, and the 
airlines' employees and retirees will get to keep their full earned 
pensions.
  I am pleased this bill includes four tariff-related bills I authored 
that will help Michigan companies become more competitive.
  I am also pleased that the bill encourages companies to use automatic

[[Page S8761]]

enrollment and automatic increase in 401(k) pension plans to ensure 
that workers save more.
  In addition, this bill includes long-overdue reforms to multiemployer 
pension plan law. These reforms will allow multiemployer pension plans 
to address any short-term funding crises as well as add new flexibility 
to advance fund and guard against a future crisis. Unfortunately, the 
bill also takes the unwise step of allowing underfunded multi-employer 
pension plans to cut benefits that workers have already earned. While I 
understand that shared sacrifice may be necessary in some instances, 
taking away earned benefits is unfair, and I hope this does not set a 
precedent for future pension laws.
  I am also disappointed that this bill does nothing to pay for making 
permanent provisions enacted in the 2001 tax law to expand tax-
preferred retirement and education savings accounts. The conference 
agreement makes these tax cuts permanent without offsetting their cost. 
According to Joint Committee on Taxation estimates, making these tax 
cuts permanent would cost $52.6 billion between 2007 and 2016. We are 
deep in a deficit ditch and already each American citizen's share of 
the debt is almost $29,000. Instead of just adding to our deep fiscal 
troubles, we should be closing down abusive tax shelters and offshore 
tax havens and coming up with other ways to pay for any further tax 
cuts.
  While this bill is less than perfect, on balance I will support it 
because of the critical need to address retirement security for 
millions of Americans.
  Mr. REED. Mr. President, the Pension Protection Act of 2006 would 
strengthen private pension plan funding and improve the financial 
position of the Pension Benefit Guarantee Corporation, PBGC. While the 
bill reflects difficult compromises, it is important that we act now to 
preserve the financial health of defined benefit pensions.
  This legislation is an important step toward protecting the pensions 
of working Americans. Today's workers will live longer and work longer 
but also spend more time in retirement than ever before, so it is vital 
that the pension benefits promised to workers will actually be there 
when they retire.
  The crisis in private pensions is just part of the growing problem of 
economic insecurity for many Americans. Although the economy has been 
growing, job growth has been modest, wages are not keeping pace with 
inflation, income inequality is growing, employer-provided health 
insurance coverage is falling, and private pensions are increasingly in 
jeopardy. Soaring prices for gasoline, home heating, health care, and 
college tuition is squeezing the take home pay of most workers. Many 
workers have little left over for retirement savings after making ends 
meet for basic living expenses.
  Meanwhile, many employers shift the risk and responsibility of 
adequate retirement funds onto workers, as retirement prospects are 
more uncertain than ever. Twenty years ago, most workers with a pension 
plan could expect to receive a defined benefit based on years of 
service and salary. Today, defined contribution plans--which shift most 
of the investment risk and responsibility onto workers--have become the 
dominant form of pension coverage.
  Despite the shift away from traditional pensions, defined benefit 
plans remain a critical source of retirement support, with 44 million 
workers and retirees relying on such plans as a source of stable 
retirement income. However, as we have seen with recent pension 
terminations in the airline industry, the real risk of defined benefit 
plan defaults further exacerbates workers' uncertainty and concern 
about their retirement prospects.
  This bill tackles the growing problem of employers not setting aside 
enough money to cover their pension obligations. The Pension Benefit 
Guarantee Corporation, PBGC, estimates that total underfunding in PBGC-
insured pension plans is about $450 billion, more than $100 billion of 
which is in plans sponsored by financially weak companies that are at 
reasonable risk of default.
  However, the PBGC, which is the backstop to the defined benefit 
pension system, has funding issues of its own due to increased defaults 
by employers. At the end of 2005, the PBGC reported a cumulative 
deficit of $22.8 billion in its single-employer program. While the PBGC 
has sufficient assets to pay benefit obligations for a number of years, 
without changes in funding, the agency will eventually run out of 
money. The Congressional Budget Office estimates that PBGC's cumulative 
deficit will increase to $87 billion over the next 10 years, and 
suggests that there is a significant likelihood that all of PBGC's 
assets will be exhausted within the next 20 years.
  The Pension Protection Act would tighten the funding rule for defined 
benefit plans by requiring that plans fund 100 percent of their 
liabilities, up from 90 percent under current law. Companies with 
underfunded plans would have seven years to make up any funding 
shortfall. Financially troubled airlines with underfunded plans would 
have 17 years to become fully funded.
  The legislation would limit the use of credit balances to prevent 
companies with unfunded plans from avoiding plan contributions, 
prohibit companies with underfunded plans from increasing future 
benefits, and require an accurate accounting of each plan's true 
financial condition. Plans would also be required to provide more 
information about their current funding status to plan participants and 
beneficiaries.
  In addition, the bill contains important, long overdue disclosure 
rules to protect the pension of workers, to avoid a situation like that 
of the Enron workers who lost their entire life savings. Under this 
bill, companies would be required to give workers quarterly benefit 
statements that show the value of their assets, and explain their right 
to and the importance to diversify their investments. The companies 
would also be required to give their employees a range of options for 
investing their 401(k) plans rather than just the in company stock and 
allow workers to sell the stock after three years.
  A few of the other notable features of this bill are provisions that 
encourage low- and moderate-income workers to save for retirement by 
extending the ``saver's credit,'' and requiring automatic enrollment in 
defined contribution pensions such as 401(k) plans.
  The saver's credit provides a permanent non-refundable tax credit to 
taxpayers with incomes below certain limits if they make contributions 
to an IRA or an employer-sponsored plan. Early evidence indicates that 
the saver's credit has increased participation rates in retirement 
plans. The effects of the credit are limited, however, by its 
nonrefundability, the sharp phase-down of the credit rate for moderate-
income taxpayers, and the lack of indexing of the income limits. This 
bill would address one of the current problems with the credit by 
indexing the income thresholds starting in 2007.
  The Pension Protection Act would encourage companies to use automatic 
enrollment. Under automatic enrollment, companies can enroll employees 
in contributory pension plans and defer a specified percentage of their 
earnings into an account. Employees are free to opt out of the plan if 
they do not wish to participate. Under current rules, employees must 
make an active decision to participate in contributory plans.
  Studies show that automatic enrollment dramatically increases 
participation rates. The increase is particularly likely to benefit 
younger workers and low-income workers, who tend to have the lowest 
participation rates.
  One concern I have is that this legislation extends the higher 
contribution limits on 401(k) and IRA contributions enacted in 2001, 
which would do little to encourage retirement saving while adding over 
$36 billion to the budget deficit over the next 10 years. While tax-
advantaged retirement saving by low- and moderate-income individuals is 
likely to represent new saving, high-income individuals are more likely 
to use expanded savings opportunities to shift existing savings from 
taxable accounts to tax-advantaged accounts. In its analysis of a 
similar proposal in the President's FY 2004 budget, CBO concluded that 
expanding tax-free savings accounts would have little effect on 
personal saving.
  Nonetheless, the Pension Protection Act makes progress toward 
ensuring that workers will receive the retirement benefits they have 
earned. We must continue work to improve our pensions system to ensure 
that Americans who work hard their entire lives

[[Page S8762]]

have the financial security they deserve. Part of this work will be to 
revisit some of the elements of this bill as well as to encourage 
employers to continue to offer retirement plans to hardworking 
Americans. The dilemma is that it took the majority 8 months to bring 
this bill forward and without it, more plans and workers are 
jeopardized. Congress must continue concerted efforts to address the 
real needs of American workers.
  (At the request of Mr. Reid, the following statement was ordered to 
be printed in the Record.)
 Mr. BAUCUS. Mr. President, first, I want to thank Chairman 
Grassley, Senator Kennedy, and Chairman Enzi for their hard work and 
cooperation on this bill.
  I like the final product. It strikes a balance between getting plans 
funded and not forcing employers out of the defined benefit pension 
system. It provides certainty for cash balance plans. It makes certain 
that workers can diversify their investments out of employer stock. It 
makes changes that will help workers save for their retirements. And it 
assures that workers and retirees will receive clear information about 
the health of their plans and their individual situations.
  I don't like for one minute, however, the process that got us here. 
Chairman Grassley and I worked very closely to include tax extenders on 
this bill. We had an agreement with the House to do so. We were ready 
to sign the conference agreement. Instead, we had the rug pulled out 
from under us. The pension bill now comes to us without the extenders.
  There is a reason for the conference process. It was a process that 
was working. I think that we should have continued down that path.
  But as I said, this is a good pension bill of which we can be proud. 
We need to pass it.
  I will not go through all the provisions in the bill. They are too 
numerous to do that. But there are some points that I want to 
highlight.
  First let me address single-employer pension plan funding. When I 
spoke last November about the pension bill that was then pending in the 
Senate, I asked my colleagues to remember that we are here to protect 
workers' pension benefits. That has been our goal from day one. And 
that is what this bill does.
  The current system is broken. The Pension Benefit Guaranty 
Corporation--the Federal corporation that guarantees defined benefit 
pension benefits--has a $23 billion deficit. The existing rules and 
temporary congressional fixes have created unpredictable funding 
requirements. As a result, employers are freezing their plans as a 
preliminary to leaving the defined benefit system altogether. And many 
view defined benefit plans as an antiquated vehicle for delivering 
retirement benefits.
  How do we fix the system? We would all like to get the plans fully 
funded. We would all like not to increase funding requirements too much 
for employers who cannot afford it. We would all like to see defined 
benefit plans continue. That is especially true for the 44 million 
Americans now receiving retirement benefits from defined benefit plans 
or earning benefits under them.
  Addressing these goals required a delicate balance. The balance that 
we struck is one of which I am proud. It reflects difficult compromises 
by all parties. There is no perfect answer here. But I think that we 
came as close as we could.
  Employers will not be able to make promises that they don't fund. 
Employers and unions will not be able to negotiate for benefit 
increases without paying for them. Workers will have to push for better 
funding if they want to continue to earn benefits.
  The medicine may not taste very good. But it is necessary to keep the 
patient alive.
  At the same time, there are some patients that are so sick that they 
need more than harsh-tasting medicine. They need some understanding and 
a chance to recover. We are giving that chance to the airlines. Maybe 
that way we can avoid the harm that will come to the workers and 
retirees--and the PBGC--if the plans terminate.
  Second, let me address cash balance plans. We have been struggling 
with the difficult problems of a new form of defined benefit plan 
called a ``cash balance plan'' for many years. Most pension experts 
recognize the cash balance design and other hybrid plan designs as the 
future of the defined benefit system. And that future is in limbo until 
we provide certainty as to the governing rules. Yet there is a real 
concern about age discrimination and what happens to workers who get 
caught up in the switch from a traditional plan to a cash balance plan.
  This bill once again strikes a balance. It is a balance that is not 
likely to make anyone completely happy. We have dealt with the law 
going forward. We intend no inference to what the rules were prior to 
enactment. We will leave the past to the courts.
  But in the future, employers and workers will know the guiding 
principles. I expect that as a result, we will see new life in the cash 
balance world. And we also make sure that workers are protected.
  Third, let me address diversification. While defined benefit plans 
are important, many Americans today receive retirement benefits from 
their defined contribution plans. What a tragedy it was in Enron and 
other situations when workers had their entire retirement wrapped up in 
Enron stock. They could not get out even if they wanted to.
  The new law will require plans to allow workers to diversify. Workers 
won't have to. It will be their choice. But they will have that choice.
  Fourth, automatic enrollment: I am proud that this bill included a 
provision that I have been pushing for some time to allow 401(k) plans 
and 403(b) arrangements to automatically enroll workers unless they opt 
out. This means that the workers' salaries will be reduced to put 
savings into the retirement plan unless the worker instructs the 
employer not to do this withholding. And we let employers automatically 
increase the amount saved each year unless the worker says no. Many 
studies have found that this ``opt-out'' approach significantly 
increases workers'' retirement savings.
  Fifth, let me address the saver's credit and permanence of provisions 
from the Economic Growth and Tax Relief Reconciliation Act of 2001, 
which people call EGTRRA. The bill makes permanent the EGTRRA savings 
provisions affecting plans and IRAs. I worked very closely with 
Chairman Grassley to get the savings provisions included in EGTRRA in 
the first place. And I am very happy that this bill makes them 
permanent.
  Perhaps more importantly, we made the saver's credit permanent. The 
saver's credit would have expired at the end of 2006. And for the first 
time, we indexed the saver's credit so that worker eligibility will not 
shrink over time because of inflation.
  Sixth, we include the tax court modernization package. This package 
has passed Finance Committee three times. It is designed to help bring 
parity between the tax court and Article III courts. And it will 
modernize the tax court's pension system. This package is long overdue.
  Seventh, we include important incentives for charitable giving. These 
include measures to promote land conservation. And these include a 
provision to encourage IRA rollovers to charitable organizations.'
  I have been working since 2001 to allow ranchers and farmers to claim 
a special tax incentive to ensure their valuable production land 
preserved for generations of Montanans in the future. In fact, my first 
hearing as chairman of the Finance Committee in 2001 was on tax 
incentives for land conservation.
  There are numerous other provisions in this 900-plus page bill of 
which we can all be proud. We have taken on a very difficult and 
complex subject and struck the right balance. I just regret that we 
could not do it in the proper way and finished the conference. There 
were important provisions included in the conference bill that are not 
included in the pension bill before us. We all know what they are and 
the reasons they are not included. I am sorry that the Senate process 
has come to such a sad state.
  But after nearly 3 years, several hearings, and countless missed 
deadlines, the Senate is about to pass a monumental pension bill. It 
will enhance retirement security for millions of Americans.
  There are many who deserve thanks for this legislation. I want to 
thank

[[Page S8763]]

Chairman Enzi and Senator Kennedy from the Health, Education, Labor and 
Pensions Committee. They provided excellent leadership and cooperation.
  I want to thank their staffs, many of whom spent sleepless nights 
getting this work done. In particular, I thank Diann Howland, David 
Thompson, Greg Dean, Portia Wu, Holly Fechner, and Terri Holloway. They 
played an important role developing the retirement security provisions 
in this bill.
  I also to thank my good friend Senator Grassley, the chairman of the 
Finance Committee, for his commitment to the retirement security of 
Americans. I want to thank some staff members in particular. I 
appreciate the cooperation we received from the Republican staff, 
especially Kolan Davis, Mark Prater, John O'Neill, Dean Zerbe, 
Elizabeth Paris, Chris Javens, Cathy Barre, Anne Freeman, Elizabeth 
Goff and Nick Wyatt.
  I thank the staff of the Joint Committee on Taxation and Senate 
Legislative Counsel for their service, including Jim Fransen, Mark 
Mathiesen, Stacey Kern, Mark McGunagle, Carolyn Smith, Patricia 
McDermott, Nicole Flax, Roger Colinvaux, Ron Schultz and Gordon Clay.
  I also thank my staff for their tireless effort and dedication, 
including Russ Sullivan, Pat Heck, Bill Dauster, Jon Selib, Melissa 
Mueller, Rebecca Baxter, and Ryan Abraham. I also thank our dedicated 
fellows, Stuart Sirkin, Tiffany Smith, Mary Baker, and Tom Louthan.
  I especially want to express my sincere gratitude to Judy Miller. Her 
extraordinary efforts and contributions on this legislation went over 
and above the call of duty. I hold her in the highest esteem. And I 
can't thank her enough for her counsel and professionalism.
  Finally, I thank our hardworking law clerks and interns: Christal 
Edwards, Justin Kraske, Joseph Adams, Tom Duppong, Jonathan Lebe, 
Robert Little, Chris Polhemus, Diana Ramos, Tara Rose, John Schiltz, 
Thad Seegmiller, Gwen Stoltz, and Matthew Wergin.
  This legislation really was a team effort. And the product will do a 
lot of good. I am glad that we have finally reached the day where we 
can look forward to it soon becoming law.
  A fair and good explanation of the bill can be found in The Technical 
Explanation of HR 4 prepared by the Joint Committee on 
Taxation.
  Mr. GRASSLEY. Mr. President, I rise today in support of the Pension 7 
Protection Act of 2006.
  Every Member of the U.S. Senate should be proud to support this bill.
  This is a bill that is about one thing--improving the retirement 
security of all Americans.
  It been a long road to get here.
  There were times, I will tell you, when I wondered if we would ever 
get here.
  But the fact that we are here today shows that when people stick to a 
goal and work together, you can get great things done for the American 
people.
  I want to commend Chairman Enzi for his outstanding leadership and 
his perseverance in leading us here today.
  I can tell you that it wasn't an easy job.
  I am also very pleased to commend the great work of my colleague and 
good friend, Senator Baucus, who was my partner in the Finance 
Committee and all the way through conference on this legislation.
  We worked together and our staffs worked together.
  I wish he could be here with me today to see final passage of this 
legislation, but as we all know, he is attending to family matters that 
are far more important than anything we could be doing here in the U.S. 
Senate.
  I also want to thank Senator Kennedy, who worked tirelessly on this 
bill and was critical to the bipartisan bill before us.
  Why is this a good bill?
  I could spend all night talking about all of the positive reforms in 
this bill, but don't worry--I am not going to do that at 10 o'clock 
here tonight.
  But I do want to highlight a few parts of this legislation that will 
make Americans more secure in their retirement.
  First and foremost, this bill will ensure that American workers can 
depend on their pensions. They will know that their pension will 
actually be there for them when they retire.
  This bill will also protect the PBGC from absorbing billions of 
dollars in pension liabilities from bankrupt airlines and give those 
airlines' employees an opportunity to receive the full pension they've 
been promised.
  This bill will protect workers from the next Enron by prohibiting 
employers from stuffing company stock in their 401(k) plans.
  This bill will make permanent the bipartisan retirement savings 
provisions from the 2001 tax relief bill--increased 401(k) and IRA 
limits, a permanent low-income Savers' Credit, greater portability of 
retirement assets, and a wide array of other pro-savings initiatives.
  These provisions are vital to building a ``savers' society,'' and I 
am proud that these provisions originated in the Senate Finance 
Committee and were included in the 2001 tax bill at the insistence of 
myself and Senator Baucus.
  This bill will also encourage greater participation in retirement 
plans by promoting automatic enrollment arrangements.
  These are just a few of the key reforms in this bill. This is 
legislation that every Member of the Senate can truly be proud to 
support.
  I look forward to seeing the President sign it into law.
  I would like to incorporate by reference a technical explanation 
being prepared by the staff of the Joint Committee on Taxation that 
describes the legislative intent with respect to H.R. 4, the Pension 
Protection Act of 2006. This document expresses our understanding of 
the provisions in the bill, and it will be a useful reference in 
understanding the legislation. Chairman Thomas also made a statement on 
the floor of the House of Representatives last Friday that he had 
requested this technical explanation. The technical explanation will be 
published by the staff of the Joint Committee on Taxation as document 
number JCX-38-06, Technical Explanation of H.R. 4, The Pension 
Protection Act of 2006, as passed by the House on July 28, 2006, and as 
considered by the Senate on August 3, 2006.
  The PRESIDING OFFICER. All time has expired. Under the previous 
order, the question is on the third reading of the bill.
  The bill was read the third time.
  Mr. KENNEDY. Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second? There is a 
sufficient second. The bill having been read the third time, the 
question is, Shall the bill pass?
  The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Montana (Mr. Baucus) and 
the Senator from Connecticut (Mr. Lieberman) are necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 93, nays 5, as follows:

                      [Rollcall Vote No. 230 Leg.]

                                YEAS--93

     Akaka
     Alexander
     Allard
     Allen
     Bayh
     Bennett
     Biden
     Bingaman
     Bond
     Brownback
     Bunning
     Burns
     Byrd
     Cantwell
     Carper
     Chafee
     Chambliss
     Clinton
     Cochran
     Coleman
     Collins
     Conrad
     Craig
     Crapo
     Dayton
     DeMint
     DeWine
     Dodd
     Dole
     Domenici
     Dorgan
     Durbin
     Ensign
     Enzi
     Feinstein
     Frist
     Graham
     Grassley
     Gregg
     Hagel
     Harkin
     Hatch
     Hutchison
     Inhofe
     Inouye
     Isakson
     Jeffords
     Johnson
     Kennedy
     Kerry
     Kohl
     Kyl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lincoln
     Lott
     Lugar
     Martinez
     McCain
     McConnell
     Menendez
     Mikulski
     Murkowski
     Murray
     Nelson (FL)
     Nelson (NE)
     Obama
     Pryor
     Reed
     Reid
     Roberts
     Rockefeller
     Salazar
     Santorum
     Sarbanes
     Schumer
     Sessions
     Shelby
     Smith
     Snowe
     Specter
     Stabenow
     Stevens
     Sununu
     Talent
     Thomas
     Thune
     Vitter
     Voinovich
     Warner
     Wyden

                                NAYS--5

     Boxer
     Burr
     Coburn
     Cornyn
     Feingold

                             NOT VOTING--2

     Baucus
     Lieberman
       
  The bill (H.R. 4) was passed.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. ENZI. Mr. President, I wish to take a moment and do special 
thanks

[[Page S8764]]

on the bill that was just passed. I congratulate everybody who has 
worked on the bill. It is going to make a difference for at least 145 
million people in the United States. It is a very important bill, and 
it has been a long road with a lot of twists and a lot of difficulties. 
They all got ironed out with a very convincing vote.
  I appreciate all the people who participated in this effort and were 
able to lend their expertise, their knowledge, their background, and 
put together something that will solve the pension difficulties for 
this country.
  I particularly thank Senator Kennedy, who is the ranking member on my 
committee. He worked with me through the drafting in committee, getting 
it through committee, then merging it with the Finance Committee, then 
getting it through the Senate as a whole, and then serving on the 
conference committee to get it all ironed out. He has been delightful 
to work with on this issue and other issues that deal with health, 
education, labor, as well as the pension bill.
  I thank Senators Grassley and Baucus for their extremely hard work. 
They brought the finance piece, the tax part together. They are experts 
in that area. They work together extremely well and extremely hard. 
Without their participation, this bill would not have been possible.
  I appreciate everybody's commitment to the private pension system and 
their willingness to strive for solutions, not just to look at issues, 
and to make the tough decisions we had to make.
  I also thank Senators DeWine and Mikulski, again. They started the 
hearings on this bill before we ever got to the bill part, the 
drafting. They have worked together well on the aging issues of this 
country for a long time. They know them backward and forward.
  As the bill went through the process, they made sure that specific 
instances they were aware of were known, the details were known, and we 
could consider ways to solve those as part of an entire package as 
opposed to piecemeal. They were extremely cooperative in working on it.
  Through the final days of the conference committee, they were engaged 
in asking questions and making a difference for this bill. I can't say 
enough about Senators DeWine and Mikulski and their extraordinary work.
  But there are many people who worked behind the scenes to get this 
bill completed. I thank all of my staff for their diligence, 
commitment, expertise, and hard work. Since March, many of them have 
not had a weekend off. They have spent 12, 16, 18 hours a day working 
this bill. That is a huge commitment. I am sure a weight has been 
lifted from their backs. Without their expertise, we would not have 
been able to do it.
  First off I would like to thank my staff director, Katherine McGuire. 
Without her, this bill never would be enacted. She had extraordinary 
efforts with the committee and then the conference committee and was 
able to pull people together to get an agreement. A lot of times, it 
meant not a compromise but finding a whole different way of doing it 
and engaging people and doing some research to find those other ways 
and even relying on some other committees to lend their expertise to do 
it. We made it through.
  Greg Dean, our general counsel, played a central role in the 
investment advice and prohibited transactions bill language. That is a 
very specialized part. He helped me on the Banking Committee when I was 
subcommittee chairman there and then moved to this committee. He 
expertly managed discussions throughout the process, and he brought 
various players together time and again to move the bill forward. It is 
a very technical area, and it takes someone with that kind of technical 
expertise to do it.
  I thank Ilyse Schuman, my chief counsel for the committee. She was 
able to pull together all the legal issues and was able to talk on that 
level with all of the other Senators and Members of the House to pull 
this off.
  I thank Diann Howland, who is my pension policy director, who bravely 
agreed to come back to the Hill and take on her third major pension 
reform. In light of this, she brought a fresh perspective to the 
complex issues every day and has to be commended for leadership in 
getting this bill done. She probably knows more about pensions than 
anybody I have ever met and has been a valuable resource, knowing the 
history as well as being able to move forward on a new bill and get 
some things done that are different from what has been done before but 
things that have preserved pensions for people.
  David Thompson brought a superb understanding of the intricate and 
complex legislation issues to the table and has a unique ability to 
explain these difficult issues in relatively few words and also explain 
some of the charts that went along with them. Again, I want to thank 
Amy Angelier who works as my budget staffer and approps staffer and 
policy adviser. She knows the intricacies of how the budget and the 
appropriations and the policy all have to fit together, whether it is 
pensions or whether it is banking or whether it is the rest of the 
issues we cover under Health, Education, Labor and Pensions. She was on 
top of each and every aspect of the budget aspects of this bill and 
helped guide it to success.

  Now, my staff didn't do this alone. My staff worked closely with the 
staffs of my other Senate conferees, and those individuals deserve 
thanks. They are Michael Myers, Portia Wu, and Holly Fechner of Senator 
Kennedy's HELP Committee staff; Kolan Davis, Mark Prater, John O'Neill, 
Judy Miller, Stu Sirkin, Russ Sullivan, Pat Heck, on the staff of the 
Finance Committee for Senators Grassley and Baucus.
  I especially commend Mark Prater for his leadership over the last 
week helping us to maneuver through troubled waters. He really knows 
the tax issues and knows the interplay between the moving parts in that 
whole area and was a tremendous help.
  I would also like to thank the nonpartisan legislative counsels and 
the staff from the Joint Committee on Taxation for their very long 
hours and professionalism. They had to be in with all of the different 
times as all of these meetings were going on. Every person with a 
pension should join me in thanking Jim Fransen, Stacy Kern, Carolyn 
Smith, Patricia McDermott, and Nikole Flax.
  Finally, I thank my chief of staff, Flip McConnaughey. He did an 
excellent job holding the office together and keeping a focus on 
Wyoming's specific issues when the pension conference kicked into full 
gear.
  So I appreciate everybody's support of this legislation. I hope I 
haven't left anybody out. There have been so many people who have been 
involved in this, as I said, for just countless hours. It has been an 
incredible commitment of time and effort and knowledge, and I really 
appreciate that because without the kind of teamwork that we had on 
this, we would not have had the kind of approval we have.
  I thank the Chair, and I yield the floor.
  Mr. SANTORUM. Mr. President.
  Mr. FRIST. Mr. President, if I could have one minute.
  The PRESIDING OFFICER. The majority leader is recognized.
  Mr. FRIST. I just wanted to thank Chairman Enzi for his tremendous 
leadership. So many people have been thanked over the course of the 
night, and it has been a very productive 4 weeks. But if you look at 
the committee chairman, he has probably been the busiest just 
overseeing the greatest number of bills, and then on top of that, 
having a very challenging conference, as we have all seen. It started 
with pensions, and for a period developed into about three or four 
other issues. I just wanted to thank him for his work, his tremendous 
work, his dedication, his passion, his independent but dedicated 
thinking where he listened to everybody and to his staff who have been 
tremendous on this particular bill, a very difficult bill, the pensions 
bill.
  So on behalf of all of us, we thank Chairman Enzi.
  Mr. ENZI. I thank the Senator.
  Mr. GRASSLEY. Mr. President, after great effort by many people, the 
Senate has voted to agree to H.R. 4, the Pension Protection Act of 
2006.
  Credit must go to the dedicated members of my staff, who spent many 
hours over many months working on the issues that ultimately led to 
this bill. Kolan Davis, Mark Prater, John

[[Page S8765]]

O'Neill, Dean Zerbe, Elizabeth Paris, Chris Javens, Cathy Barre, Anne 
Freeman, Elizabeth Goff, and Nick Wyatt showed great dedication to the 
tasks before them.
  As is usually the case, the cooperation of Senator Baucus and his 
staff was extremely valuable. I particularly want to thank Russ 
Sullivan, Patrick Heck, Bill Dauster, Judy Miller, Stuart Sirkin, Jon 
Selib, Melissa Mueller, Rebecca Baxter and Ryan Abraham.
  I want to show my appreciation towards HELP Committee Chairman Enzi's 
staff, including Katherine McGuire, Greg Dean, Diann Howland and David 
Thompson. I want to thank Portia Wu and Holly Fechner along with the 
rest of HELP Committee Ranking Member Kennedy's staff. I also want to 
thank the staff of Finance Committee member conferees on the pension 
bill. They include Evan Liddiard, Brendan Dunn, Manny Rossman, Wes 
Coulam, Jennifer Perkins, Jen Vesey, Amy Barber, Steve Bailey, and 
James Dennis.
  I also want to mention Thomas Barthold, the acting chief of staff of 
the Joint Committee on Taxation and his staff. The efforts of Carolyn 
Smith, Patricia McDermott, and Nicole Flax were invaluable. Roger 
Colinvaux, Gordon Clay, and Ron Schultz provided great assistance with 
the charitable provisions that are in the bill. I also want to thank 
Theresa Pattara, who worked on my staff as a legislative fellow, for 
her work on the charitable provisions.
  Finally, I want to show my appreciation to the staff of Senate 
Legislative Counsel, including Jim Fransen, Mark Mathiesen, Stacey 
Kern, and Mark McGunagle.
  Mr. President, after great effort by many people, the Senate has 
voted to agree to H.R. 4, the Pension Protection Act of 2006.
  Credit must go to the dedicated members of my staff, who spent many 
hours over many months working on the issues that ultimately led to 
this bill. Kolan Davis, Mark Prater, John O'Neill, Dean Zerbe, 
Elizabeth Paris, Chris Javens, Cathy Barre, Anne Freeman, Elizabeth 
Goff, and Nick Wyatt showed great dedication to the tasks before them.
  As is usually the case, the cooperation of Senator Baucus and his 
staff was extremely valuable. I particularly want to thank Russ 
Sullivan, Patrick Heck, Bill Dauster, Judy Miller, Stuart Sirkin, Jon 
Selib, Melissa Mueller, Rebecca Baxter and Ryan Abraham.
  I want to show my appreciation towards HELP Committee Chairman Enzi's 
staff, including Katherine McGuire, Greg Dean, Diann Howland and David 
Thompson. I want to thank Portia Wu and Holly Fechner along with the 
rest of HELP Committee Ranking Member Kennedy's staff. I also want to 
thank the staff of Finance Committee Member conferees on the pension 
bill. They include Evan Liddiard, Brendan Dunn, Manny Rossman, Wes 
Coulam, Jennifer Perkins, Jen Vesey, Amy Barber, Steve Bailey, and 
James Dennis.
  I also want to mention Thomas Barthold, the acting Chief of Staff of 
the Joint Committee on Taxation and his staff. The efforts of Carolyn 
Smith, Patricia McDermott, and Nicole Flax were invaluable. Roger 
Colinvaux [CallIn-Vo], Gordon Clay, and Ron Schultz provided great 
assistance with the charitable provisions that are in the bill. I also 
want to thank Theresa Pattara, who worked on my staff as a legislative 
fellow, for her work on the charitable provisions.
  Finally, I want to show my appreciation to the staff of Senate 
Legislative Counsel, including Jim Fransen, Mark Mathiesen, Stacey 
Kern, and Mark McGunagle.
  I yield the floor.

                          ____________________