<nobr>Oct 8, 2003</nobr>

Pension Funding Bill Clears the House; ERIC Hails Its Passage

The ERISA Industry Committee praised the U.S. House of Representatives for passage of the Pension Funding Equity Act (H.R.3108) that replaces the defunct 30-year Treasury bond rate used for calculating pension liabilities with a composite rate of high quality long term corporate bonds. The passage of this legislation is an important first step toward preserving the nation’s pension system.

“We are gratified that the House has acknowledged the urgency in enacting a replacement for the low 30-Year Treasury interest rate by passing this legislation today,” said Mark Ugoretz, president of ERIC said in a written statement. “But this is only the first step. We urge the Senate to quickly approve comparable legislation that will enable companies to maintain these vital retirement plans, which provide a secure retirement benefit to American workers.”

ERIC warns that if Congress does not act before year end, many companies that voluntarily sponsor pension plans for their employees will become subject to inflated cash contributions into their pension plans, thereby jeopardizing their ability to maintain the plans for their employees.

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