[Congressional Record (Bound Edition), Volume 149 (2003), Part 7]
[Extensions of Remarks]
[Pages 8843-8844]
[From the U.S. Government Publishing Office, www.gpo.gov]




          INTRODUCTION OF THE PENSION BENEFITS PROTECTION ACT

                                 ______
                                 

                          HON. BERNARD SANDERS

                               of vermont

                    in the house of representatives

                         Tuesday, April 8, 2003

  Mr. SANDERS. Mr. Speaker, today, all across this country, American 
workers and the middle class are under severe attack. Unemployment is 
rising, our manufacturing base is collapsing, health care costs for 
workers are soaring, the minimum wage has not been raised for years and 
the decline of the stock market has devastated the retirement plans for 
millions of workers. And now, on top of all of that, the Bush 
administration and corporate America and the CEOs who receive 
compensation packages are attempting to destroy the pensions that have 
been promised to millions of American workers.
  In response, I am introducing the Pension Benefits Protection Act to 
protect the pensions of American workers with 117 original co-sponsors. 
This legislation has been endorsed by the AARP representing more than 
35 million Americans, the AFL-CIO representing more than 13 million 
American workers, the Pension Rights Center and the Communication 
Workers of America. I have attached the statements of David Certner, 
AARP Director of Federal Affairs, and Richard Trumka, Secretary 
Treasurer at the AFL-CIO, in support of this legislation for inclusion 
in the Congressional Record.
  Those of us in Congress who care about this issue, along with the 
grass roots organizations, will do everything we can to see that 
workers in America do not see their pensions slashed by up to 50 
percent as a result of cash balance conversions.
  The Pension Benefits Protection Act requires the Department of 
Treasury to withdraw proposed cash balance conversion regulations that 
would give companies the green light to violate the pension age 
discrimination laws that are on the books. The legislation would also 
require companies that convert to cash balance plans to allow older 
workers and those with at least 10 years on the job the choice to 
remain in their traditional pensions.
  Specifically, this legislation does 2 things:
  First, it requires companies that convert to cash balance plans to 
allow workers who are at least 40 years old or have at least 10 years 
of service the choice to remain in the traditional defined benefit 
pension plan that was promised to them when they started working for 
the company. In other words, they cannot be forced into an inferior 
plan.
  When a company makes a promise to its employees regarding their 
pension benefits, it must not be able to pull the rug out from under 
its employees by cutting their pension benefits in mid-stream. 
Companies receive some $100 billion in tax incentives to set up these 
pension plans. Given that reality, Congress must allow older workers or 
those with at least 10 years of service the option to remain in their 
traditional defined benefit pension plan.
  Secondly, this legislation requires the Bush administration to 
immediately withdraw all of their proposed cash balance pension 
regulations that, if finalized, would give companies the green light to 
commit age discrimination against older workers by converting to cash 
balance schemes. Just yesterday, the Treasury Department withdrew a 
portion of the proposed regulations dealing with highly compensated 
employees. While, in my view, this is a step in the right direction, 
the Administration must go further and withdraw all of these proposed 
regulations, and require all companies

[[Page 8844]]

that convert to cash balance plans to protect older workers. We do not 
tolerate discrimination against workers based on race, based on gender 
and based on other criteria, and we will not tolerate discrimination 
based on age. Last January, in a letter to the President, 217 Members 
from both the House and the Senate made that very clear.
  Through my involvement with the IBM cash balance conversion, I have 
heard from thousands of workers throughout the country who have 
expressed their anger, their disappointment, and feelings of betrayal 
by cash balance conversions. These are employees who had often stuck 
with their companies when times were tough. These were employees who 
had often stayed at their jobs precisely because of the pension program 
that the company offered. And, these are the same employees who woke up 
one day to discover that all of the promises that their companies made 
to them were not worth the paper they were written on.
  Instead of providing protections for these workers, President Bush 
has proposed regulations on cash balance plans that would devastate the 
traditional pension benefits of millions of employees in large 
companies throughout the United States.
  The White House policy on cash balance pension plans is a direct 
assault on the retirement plans of millions of American workers. 
Hundreds of companies all across America have already reneged on the 
retirement promises they made to their employees by switching to cash 
balance pension plans. If the White House proposal is aloud to stand, 
it will give the green light to hundreds more--resulting in financial 
disaster for workers all across the country who will not be receiving 
the pensions they were promised.
  Of the 44 million Americans with traditional defined benefit plans, 
some 8 million employees with $334 billion in pension fund assets have 
been impacted by cash balance pension conversions. According to the 
General Accounting Office, older employees can have their pensions 
slashed by up to 50 percent by a cash balance scheme.
  The Equal Employment Opportunity Commission has received over 1,000 
age discrimination complaints from workers in over 30 different 
companies who have been negatively impacted by these schemes.
  According to the Labor Department's Inspector General, companies that 
have converted to a cash balance scheme are illegally slashing the 
pension benefits of their employees by as much as $199 million each and 
every year. Even worse, the Inspector General found that the Federal 
Government was not enforcing the pension laws and regulations that are 
on the books when companies shift to cash balance.
  The courts have ruled that Xerox, Georgia Pacific and the Bank of 
Boston illegally slashed over $300 million in pension benefits of more 
than 20,000 employees by converting to a cash balance plan.
  Last July, 308 Members of Congress voted in favor of an amendment 
that I offered to prohibit the IRS from using any funds that are in 
violation of the pension age discrimination laws that are on the books 
when companies shift to cash balance schemes.
  According to the President's spokesman Arl Fleischer, criticisms that 
cash balance plans hurt older workers are ``not valid.''
  Well, tell that to Larry Cutrone, a 54-year-old employee from New 
Jersey, who worked for AT&T for 28 years, who woke up one day to find 
that his pension had been slashed by over 50 percent as a result of a 
cash balance conversion.
  Tell that to House Majority Leader Tom DeLay, Speaker of the House 
Dennis Hastert, or Rep. Rob Portman. According to the Congressional 
Research Service, they would have their pensions slashed by as much as 
69 percent under cash balance plans.
  During the next debate on pension legislation, I will be asking my 
colleagues in the House, if cash balance plans are good enough for 
workers, why aren't they good enough for Members of Congress?
  The answer to that question, of course, is that cash balance pension 
conversions are not good for older workers. They need to be given a 
choice.

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