<nobr>Dec 8, 2008</nobr>

ERIC Warns Congress about Inaction on Pension Funding Relief

For Immediate Release: December 8, 2008

Washington, D.C. -- In a letter sent today to all Members of Congress, The ERISA Industry Committee (ERIC), a Washington, D.C.-based trade association representing America's major employers, warned lawmakers of the severe consequences of not acting on pension funding relief legislation. ERIC for the past several weeks has been actively engaged and in contact with staff from the Administration and Capitol Hill to press the importance of relief to both pension plan sponsors and participants.

"If Congress fails to act, employers will face unprecedented funding obligations next year that will dwarf those Congress anticipated when it passed the Pension Protection Act in 2006," said ERIC President Mark Ugoretz. "The impact on jobs, pension plan freezes, and 401(k) cutbacks will be significant," he said.

ERIC said neither Congress nor anyone else anticipated the current severe economic downturn, and how the assets of pension plans subject to the new funding requirements have lost nearly $1 trillion in value since the beginning of the year, and virtually overnight turned over-funded plans into under-funded plans, and moderately under-funded plans into severely under-funded funds.

"If employers are forced to make these contributions to comply with the PPA, most will have no choice but to sharply reduce their workforces and business spending. Mass lay-offs and a sharp contraction in business spending are the surest path to deepening and prolonging the nation's current economic downturn," said Ugoretz.

To avoid these results, ERIC urges Congress to temporarily and immediately adjust the schedule for meeting the PPA's new funding targets to take into account the steep decline in pension asset values. ERIC also agrees with and signed on to a letter sent last week by a coalition of employer and business associations to the key House and Senate Committees with jurisdiction over pension issues, urging Congress to act expeditiously on the recommendations that ERIC and others have made for a reasonable and sensible approach for temporary relief. The group letter also rebuts the so-called "concerns" raised recently by Administration officials.

ERIC's letter sent today and the group letters are below.

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For more information:
Ted Godbout
Manager, Communications
The ERISA Industry Committee
1400 L Street, NW, Suite 350
Washington, DC 20005
Phone: (202) 789-1400
Fax: (202) 789-1120
tgodbout@eric.org
www.eric.org

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The ERISA Industry Committee (ERIC) is a non-profit association committed to representing the advancement of the employee retirement, health, and compensation plans of America's largest employers. ERIC's members provide benchmark retirement, health care coverage, compensation, and other economic security benefits directly to tens of millions of active and retired workers and their families. ERIC has a strong interest in proposals affecting its members' ability to deliver those benefits, their cost and their effectiveness, as well as the role of those benefits in the American economy.

Text Files:

ERIC Letter to All Members of Congress

Group Letter to Key House Members

Group Letter to Key Senate Members

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