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Senator Tom Harkin (D-IA) introduced legislation on June 28 to protect U.S. workers’ pensions and ensure that employees receive the retirement benefits they are entitled to. The Restoring Pension Promises to Workers Act of 2007 (S.1725) would restore basic fairness to America's pension system by forcing corporations that provide lavish executive pension arrangements to also provide a guaranteed, defined benefit plan for the rest of their employees. The bill would also enact a number of other reforms to help ensure workers' pensions will be there for them when they retire, including protecting benefits for employees when companies merge or change ownership. The bill has been referred to the Senate the Committee on Health, Education, Labor, and Pensions.
"More and more companies, even those with a healthy bottom line, are telling workers they can no longer afford to provide them with the benefits they had been promised," said Harkin. "But at a time when employees' retirement security is anything but secure, things are looking rosy in the corporate board room, where our nation's corporate elite make sure that they have pensions, higher incomes and other benefits so generous that Midas would have been embarrassed. This is just plain wrong."
In addition, the legislation would:
Create an Office of Pension Participant Advocacy. Within the Department of Labor, this office would be a resource for people who are affected by shortcomings in federal private pension laws. The advocate could call for clarifications of current law and share participant complaints with Congress. The advocate would also consult with participant advocate groups, companies, and other federal entities that work with pensions to develop policy recommendations to share with the Secretary and Congress. The advocate would also provide technical assistance to plan sponsors about their obligations to participants.
Prohibit elimination of accrued benefits during mergers and acquisitions. This provision would eliminate an arcane legal loophole that has allowed companies who change ownership to revoke employees' pension benefits. For example, the sale of a Halliburton subsidiary to another company caused many of the employees to lose up to half the value of their expected pensions, even though the workers were doing the exact same jobs they had done previously. According to press accounts, the loss in pension benefits amounted to $25 million.
Shield workers from mistakes made by pension administrators. Mistakes are often made in calculating pension payments, sometimes resulting in overpayments to beneficiaries. Current law allows the pension plan to sue a participant for any and all overpayments years after the payments were made, even after the individual has retired. Harkin's bill would prevent a participant from paying for the plan's mistake if it would cause a significant hardship to the individual. It would also provide a 3-year statute of limitations on suits for overpayment.
Protect retired workers from cuts to their pension benefits. This provision would prevent plans from cutting benefits for people who retired before the cutbacks were adopted by the plan.
Provide protection for female workers. This provision would protect pensions for surviving spouses of deceased federal employees, and former spouses of federal employees.
A copy of the legislation can be found at: Website
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