U.S. House Committee Approves Pension Reform Bill
Given the growing number of pension-fund defaults, including the recent $9 billion default by United Airlines, Congress is starting to take action. On June 30, 2005, the House Committee on Education and the Workforce passed a bill that seeks to reduce the number of pension defaults. According to a Washington Post story, the bill "requires corporations to use a new interest rate when measuring their future pension obligations; curbs increases in benefits promised from underfunded plans; increases premiums paid to the PBGC, the federal agency that insures pension plans; and enhances public disclosure of information about severely underfunded plans."
Committee Democrats argued that there were not allowed sufficient time to study the bill and thus voted "present." Amendments to the proposed legislation offered by Democrats were rejected by the Republican-controlled Committee.