From CBS MarketWatch.com, “House panel OKs pension-plan hike: Lawmakers wrangle over cutting $50 billion from budget.” Excerpt:
A House panel on Wednesday approved legislation that would boost premiums paid to the Pension Benefit Guaranty Corp. by more than $6 billion over the next five years.The legislation, approved by the House Education and Workforce Committee by voice vote, would provide the agency with about $6.2 billion in additional premiums.
The article notes that the House proposal, authored by Workforce Committee Chairman John Boehner, R-Ohio, would phase in increases in employer-paid premiums, “first by increasing them from $19 to $30 per pension plan participant beginning in 2006.” The PBGC would then have the discretion to annually increase premiums by as much as 20 percent, “although Congress would have the right to vote down the proposed increases.”
You can access two press releases here and here on the proposal. See also A Plan for Fiscal Responsibility: Strengthening Higher Education and Protecting Retirement Security on Behalf of Students, Workers, Retirees, & Taxpayers [pdf] by Rep.Boehner (R-OH), especially Part Two: Strengthening the Financial Condition of the Pension Benefit Guaranty Corporation on Behalf of Workers, Retirees, & Taxpayers [pg.11]. Excerpt:
Just four years ago, the PBGC operated with an annual surplus. However, the agency’s financial health has been on a strikingly rapid decline ever since. Although the PBGC has enough resources to make benefit payments for the near future, the long-term outlook for the agency is anything but certain. With some $450 billion in pension plan underfunding among financially weak companies looming on the horizon, the PBGC’s deficit is expected to grow even further. In relatively short order, the PBGC has gone from a little-known agency among most Americans to one that is now consistently in the headlines – and for good reason. Taxpayers have a major stake in its long-term outlook. . .Two important steps are essential to improving the financial condition of the PBGC and ensuring its long-term solvency: (1) reforming funding rules to ensure pensions are more adequately and consistently funded; and (2) increasing premiums paid by employers to the PBGC in a responsible fashion. The Pension Protection Act, which is expected to be voted on by the House later this fall, would take both of these steps. The budget reconciliation process presents an opportunity to accomplish the second of the two.
Text of the proposed legislation is here.