The ERISA Industry Committee President and CEO Scott Macey said in a statement this week that he applauds Congress for including pension stabilization provisions with legislation that prevents a student loan interest rate hike and extends transportation funding, but he is adamantly opposed to Congress including an increase in Pension Benefit Guaranty Corporation premiums.
“If anything, increasing premiums is just an incentive to push more plan sponsors to abandon their pension plans,” he said. “Moreover, the PBGC’s deficit is artificially high due to the low interest rates used to calculate the agency’s deficit because of the Federal Reserve’s current monetary policy o keep rates low. We encourage Congress to carefully analyze the reasons behind the PBGC’s purported deficit before proceeding with raising premiums.”
He added that plan sponsors are not looking for a bailout, but rather pension funding rules that recognize market conditions and sound and realistic assumptions.
“They simply want more realistic interest rates to calculate their pension liabilities, as opposed to the artificially low rates under the Federal Reserve’s current policy. While we strongly support pension stabilization, we do not believe that Congress should be including an increase in PBGC premiums as a tradeoff for enacting pension stabilization.”