DeWine moves stall pension efforts

[Algorem]

http://www.cleveland.com/news/plaindealer/index.ssf?/base/news/112919635383710.xml&coll=2

He says reforms would hurt struggling companies
Thursday, October 13, 2005

Washington- White House and congressional efforts to shore up the nation's frail pension plans are stalled over an Ohio Republican's attempts to protect manufacturers.

Sen. Mike DeWine agrees with everyone that the government system for safeguarding private pensions needs help, especially with big companies like United Airlines declaring bankruptcy and shifting their obligations onto the federal Pension Benefit Guaranty Corp. So many companies have reneged on their pension promises that the PBGC has a $23.3 billion shortfall, and it's only expected to grow as companies like Delphi Corp. declare bankruptcy.

The question is what to do about it.

This is where DeWine, who chairs a Senate subcommittee overseeing pension matters, is making trouble - and winning allies from the United Auto Workers to the National Associa tion of Manufacturers...


http://www.cfo.com/article.cfm/5011912/c_5012142?f=home_todayinfinance

Pension Bill Now in Doubt

Pension funding ideologies clash as companies phase out defined-benefit plans.

Stephen Taub, CFO.com
October 11, 2005

Who should shoulder the costs of private, traditional defined-benefit pension funds?

That question is at the center of a debate that figures to intensify as more old-line companies — such as automakers, airlines, and steel mills — have trouble meeting pension obligations. Indeed, corporate pensions in the United States are underfunded by some $450 billion, according to Reuters.

Lawmakers were hoping to pass a bill that would require financially shaky companies with pension obligations to pay a larger premium to the financially overburdened Pension Benefit Guaranty Corp. (PBGC), the fund of last resort for companies that default on pension payments. However, the legislation reportedly is stalled because two senators — Mike DeWine (R-Ohio) and Barbara A. Mikulski (D-Md.) — don't believe that companies with low credit ratings should pay higher premiums than companies with high credit ratings.

"It's a ridiculous provision.... When you have companies that show any sign of weakness, you beat them over the head" by toughening pension funding rules, said DeWine, Reuters reported. Mikulski added that there was no direct link between a company's credit rating and how well its pension plan was funded. "We don't want to pick winners and losers," she added...




ANALYSIS
Making the pension crisis worse
Reform bill could end up putting more corporate programs at risk

http://www.cleveland.com/business/plaindealer/index.ssf?/base/business/1129203089295290.xml&coll=2

Thursday, October 13, 2005
Rachel Beck
Associated Press
New York

-- It is looking more unlikely that Congress will pass any corporate pension reform legislation this year, but maybe that isn't a bad thing -- especially for the nation's taxpayers and many retirees, too.

That's because some of the provisions being considered would do little to prevent companies from defaulting on their retirement promises, and could even prompt some pension program terminations. Should that happen, the public could get stuck with much of the bill.

It's not that anyone expected an overhaul of the corporate pension system to be easy. Congress has been rushing to get something done this year after the Bush administration in January initiated a push for a cleanup.

There's no doubt that stability and health need to be brought back to the nation's defined-benefit plans, which promise retirees a monthly check and often health coverage. Those plans were underfinanced by $354 billion through the end of last year, meaning their liabilities far outweighed their assets...

[cassiepriam]

1. You can always count on Dewine to be De Weeny.

I'll never forget him sleeping during the Iran Contra hearings.
Apparently he found a shadow govt breaking the law quite boring.

[OzarkDem]

2. Mikey has to raise money

for his re-election campaign. He has to keep the donor satisfied.

[TheFarseer]

3. I would like to see mandatory 401k

for all full-time employees. Companies can match if they want to and presumably should if they are making a profit but would not be required to, so companies should be able to get on board with my proposal but the important thing is workers would have some sort of option for their retirement planning needs. Pensions suck IMO. Like it or not it is helping drag down GM and others and it's not good for workers because they can declare bankruptcy and screw you over.