[Congressional Record (Bound Edition), Volume 152 (2006), Part 13]
[Senate]
[Pages 17126-17127]
[From the U.S. Government Publishing Office, www.gpo.gov]




                     PENSION PROTECTION ACT OF 2006

  Mrs. CLINTON. Mr. President, I would like to begin by commending 
Senate Health, Education, Labor and Pensions Committee Chairman Enzi, 
Senate HELP Committee Ranking Member Kennedy, and the rest of my 
colleagues on the HELP Committee and the Senate Finance Committee for 
their commitment to working on a bipartisan basis toward the shared 
goal of comprehensive pension reform. This legislation is the product 
of their tireless work on behalf of our Nation's workers and retirees.
  In particular, I would like to express my appreciation to the 
conferees in the Senate and the House for undertaking the difficult 
work of negotiating a compromise between the two Chambers' bills. It is 
a challenge to reconcile legislation on such a complex set of reforms, 
and it is an enormous credit to the hard work of the conferees--and 
their staffs--that we were in a position to act on this important piece 
of legislation.
  The protection of the retirement security of workers and their 
families is one of my highest priorities as a Senator. The promise of a 
pension is one of the central tenets of the compact between an employer 
and an employee and one of the essential components of the American 
dream. It is incumbent on our businesses and on our Nation to make good 
on that promise. So many of my constituents in New York, like millions 
of other Americans throughout the Nation, work their entire lives to 
secure the right to pension benefits when they retire, and they come to 
depend on those benefits to provide financial security for them and 
their loved ones through retirement.
  Unfortunately, the private pension system in America is badly in need 
of repair. More and more companies are terminating the defined benefit 
plans that serve as a dependable source of retirement income for tens 
of millions of workers throughout the country. Workers in terminated 
plans often find their pension benefits slashed, and the consequences 
for these workers are all too real, including postponed retirement, 
additional jobs, and tighter budgets.
  Liability for these pension plans is shifted to the Pension Benefit 
Guaranty Corporation, which insures defined benefit plans but is now 
$22 billion in debt and itself could require a taxpayer bailout if more 
companies abandon their plans. And in fact, many more companies' 
defined benefit plans are on the brink of insolvency--defined benefit 
plans insured by the PBGC are underfunded by roughly $450 billion, 
including almost $100 billion for defaults it calls reasonably 
possible. I meet often with New Yorkers who are deeply anxious that 
they will never see the pension benefits they worked so hard to earn.
  The Pension Protection Act makes great strides toward restoring the 
great promise of the private pension system for workers in New York and 
throughout the Nation. Among the important reforms in this bill are 
provisions that: require companies to fully fund their single-employer 
defined benefit plans; provide incentives for companies to contribute 
more money to their pension plans during good years;

[[Page 17127]]

strengthen the multiemployer pension system; improve the pensions of 
public safety officers; allow Reserve and National Guard members to 
draw on their retirement savings without penalty when they serve our 
country in active duty; and take important steps toward restoring the 
solvency of the PBGC.
  The Pension Protection Act also contains provisions that aim to 
protect the retirement security of workers as more employers transition 
from defined benefit pensions to 401(k)s and new hybrid plans. The 
legislation will clarify the legality of these hybrid plans on a 
prospective basis, and prohibit the ``wear-away'' of the benefits of 
older employees under these plans. The legislation will encourage the 
use of automatic enrollment for 401(k)s and other defined contribution 
plans. And the legislation will prohibit employers from requiring 
employees to keep their retirement savings in company stock, a practice 
that magnified the harmful impact of the Enron and other corporate 
scandals on employees.
  Finally, in light of the low personal savings rate in this country, 
it was vitally important that the bill included tax incentives for 
savings. I am particularly happy that the bill makes permanent the 
Saver's Credit, which helps middle- and low-income families save for 
their retirement. Making the credit permanent was one of the reforms 
that I and some of my colleagues call for in the American Dream 
Initiative. These are smart and commonsense reforms that will offer 
clarity and certainty in the retirement planning of the millions of New 
Yorkers and the 65 million Americans estimated to participate in 401(k) 
and defined contribution plans.
  I also commend the conference on making a number of improvements to 
the Senate bill that was passed last year. For one, the new bill is 
wise to drop a provision that would have looked to the credit rating of 
a company to determine whether it is at risk for plan default and 
therefore must make accelerated contributions into its plan. That 
approach would have made it far more difficult for a company to 
preserve a plan during a period of financial distress, a result that is 
undesirable for the company, its employees, and the American taxpayer. 
Likewise, the legislation increases the ``smoothing'' period for the 
calculation of assets and liabilities from what was in the Senate bill, 
a change that will improve the predictability of pension payments and 
make it easier for employers to keep their pension promises.
  The legislation is not without its flaws. The legislation walks back 
several of the provisions in various areas of the Senate bill that 
provided important protections for workers. My strong preference was to 
see the costs in the legislation offset. Also, while funding provisions 
in the bill required a certain measure of compromise on the part of all 
of the stakeholders, I am concerned that these provisions could exact 
an unintentional and unnecessarily harsh toll on employees in certain 
industries. I will be monitoring the impact of the bill closely, and I 
will work with my colleagues to correct the situation should this 
occur. Finally, while the bill protects the pensions of many of the 
thousands of airline employees who live and work in New York, we must 
continue to find ways to assist other distressed companies in taking 
the steps necessary to preserve the pension plans of their employees.
  And indeed, we should not regard this bill as an excuse to rest on 
our laurels. Our work on behalf of workers and their families is only 
beginning. We need even more Congressional action to pursue public and 
private ways of addressing the retirement security of workers in New 
York and throughout America: portable retirement accounts for workers 
with even stronger incentives to save, offering real health care 
options to retirees and workers; and protecting Social Security for our 
seniors.
  Workers and their families are counting on their employers to keep 
their pension promises. The Pension Protection Act will help employers 
to do so, while strengthening the defined benefit system, protecting 
the PBGC, and encouraging private savings. This bill is an important 
step toward the goal of restoring retirement security for working men 
and women. For these reasons, I applaud the Senate for passing this 
important piece of legislation, and I call on the President to sign it 
promptly. I look forward to working my colleagues on further measures 
to enhance the defined benefit system and increase retirement savings 
for workers in New York and throughout the Nation.

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