Letter to Reid, Pelosi, McConnell, and Boehner re: DWF on MRD and Pension Funding Relief | Business Roundtable

Contact

  • General Inquiries
    202.872.1260
    info@brt.org
  • Mailing Address
    300 New Jersey Avenue, NW
    Suite 800
    Washington, D.C. 20001
  • Media Contact
    Rayna Valenti
    Director, Communications
    rvalenti@brt.org

Membership Contact
LeAnne Redick Wilson
Senior Vice President
​lwilson@brt.org

    

What is Business Roundtable

Business Roundtable (BRT) is an association of chief executive officers of leading U.S. companies working to promote sound public policy and a thriving U.S. economy.

More Than Leaders. Leadership.

Business Roundtable is an association of chief executive officers of leading U.S. companies working to promote a thriving economy and expanded opportunity for all Americans through sound public policy.

About BRT

The Honorable Harry Reid
Senate Majority Leader
United State Senate
S-221 Capitol Building
Washington, DC 20510

The Honorable Nancy Pelosi
Speaker
United States House of Representatives
H-232 Capitol Building
Washington, DC 20515

The Honorable Mitch McConnell
Senate Minority Leader
United States Senate
S-230 Capitol Building
Washington, DC 20510

The Honorable John Boehner
House Minority Leader
United States House of Representatives
H-204 Capitol Building
Washington, DC 20515

Dear Bipartisan Leaders:

The recent decline in the value of equity and other investments has diminished our nation’s pool of retirement savings. In addition to steps that are already being taken to stabilize the financial markets, we believe it is critical to initiate immediate action to address retirement and financial security concerns that have been caused by the current economic crisis.

We urge you to explore all available legislative and regulatory options to address the following time-sensitive problems facing our retirement system and the economic security of American workers and retirees.

RELIEF FROM AGE 70½ DISTRIBUTION RULES. A 50% excise tax applies to anyone who fails to withdraw the proper amount from their retirement plans each year after they reach age 70½. Distributions for 2008 will have to be calculated based on the value of retirement savings at the end of 2007 – a value that does not reflect the market declines of the last few weeks. That is unfair and we urge an immediate, temporary freeze on mandatory retirement account withdrawals for 2008, along with implementation of additional relief for those seniors who need current funds (and do not have the option to delay) and for those who have already made withdrawals for 2008 (e.g. to offset withdrawn amounts against future requirements).

PRESERVATION OF DEFINED BENEFIT PENSION PLANS. The dramatic decline in pension plan asset values, combined with rapid transition to a stringent new funding regime, is likely to result in more defined benefit pension plans being frozen, worker and retiree benefits being limited or reduced, and employers having to make large contributions to meet accelerated new funding mandates. This comes at precisely the time our nation can least afford to divert resources that are desperately needed for job retention, job creation, and economic growth. Pension plan obligations that come due many years in the future must be funded in a timely manner, but the recent asset losses should be prudently replenished after the current economic conditions return to normal. We urge you to adopt prudent, temporary pension funding changes that address these concerns, such as to temporarily allow full smoothing of recent large asset losses, and to adjust certain other transition funding requirements. A failure to act promptly may encourage some employers to freeze their plans or otherwise reduce retirement benefits in order to comply with current rules.

We commend you on your leadership in dealing with the current financial crisis and urge you to continue your efforts to improve the economic outlook of both individuals and the nation. Our organizations are committed to promoting long-term financial security. Workers should be provided with financial incentives to save, should have access to effective retirement plans, and should be able to keep working and contributing to society regardless of age. Working together, we can better ensure the financial security of Americans of all ages.

Sincerely,

Bill Novelli CEO, AARP

John Castellani President, Business Roundtable

Todd Stottlemyer President, NFIB

Andy Stern  President, SEIU