December 06, 2006
Wyden provision keeps companieswith ailing pension plans from hoardingcash for executives
The pension fairness measure was includedin the Senate bill passed late yesterday Washington, DC A provision championed by U.S. Senator Ron Wyden to keep companies with significantly under-funded employee pension plans from locking away retirement funds for top company executives was included in a major pension reform bill passed by the full U.S. Senate late last night."Everyones retirement savings, whether theyre an executive or an entry-level employee, should be treated fairly, Wyden said. This provision will ensure that if a companys pension plan is in financial trouble, the company cannot hide the CEOs pension away in a lockbox while their employees get creamed."The provision prohibits companies from giving executives deferred compensation or retirement funds held in accounts outside of the same program used for all other company employees if the companys pension plan is less than 80 percent funded. This provision seeks to hold executives accountable for the performance of their companys pension plans, and to prevent them from protecting their benefits while company employees benefits are threatened.In June 2005, Wyden questioned airline industry executives at a hearing of the Senate Finance Committee about drastic pension cuts that hurt rank-and-file workers while allowing some industry executives to keep their retirement cash. Also at that hearing, Wyden shared the story of a United Airlines employee from Tigard, Oregon whose cash pension income was cut to $138 per month when the airline defaulted on its pension obligation. The taxpayer-funded Pension Benefit Guaranty Corporation is now paying some United workers pensions at less than half their original levels while Uniteds current CEO retains his company-funded $4.5 million retirement benefit. Some experts have warned that other airlines could soon default on their pension plans as well.The legislation approved by the U.S. Senate late yesterday will now go to the President for his signature.