Published: June 29, 2012
Washington – Business Roundtable (BRT) today applauded the inclusion of a pension stabilization provision in the transportation bill, which was approved by the House and Senate and is expected to be signed into law.
“The government’s efforts to keep interest rates artificially low has unintentionally inflated pension plan liabilities, increased funding requirements and forced companies to stockpile cash to satisfy upcoming commitments,” said BRT President John Engler. “By easing artificial funding obligations, this provision will allow companies to use that money for capital improvements, workforce expansion and to grow the economy.”
Business Roundtable is disappointed by the inclusion of a provision that would increase premiums levied on employers to fund the Pension Benefit Guaranty Corporation (PBGC).
“Characterizing the PBGC as a ‘premium’ does not change the fact this is a new tax on businesses,” Engler added. “This will amount to an unnecessary cost to employers at a time when the PBGC has said it will be able to guarantee benefits for the foreseeable future.”
The PBGC stated in a November 2011 report that there is no chance it will run out of money before 2020, and its financial position would improve for the following 10 years. The provision would increase PBGC premiums by approximately $9 billion.
# # #
Business Roundtable (BRT) is an association of chief executive officers of leading U.S. companies with over $6 trillion in annual revenues and more than 14 million employees. BRT member companies comprise nearly a third of the total value of the U.S. stock market and invest more than $150 billion annually in research and development – nearly half of all private U.S. R&D spending. Our companies pay $163 billion in dividends to shareholders and generate an estimated $420 billion in sales for small and medium-sized businesses annually.
BRT companies give nearly $9 billion a year in combined charitable contributions.
Please visit us at www.brt.org, check us out on Facebook and LinkedIn, and follow us on Twitter.