Seven of the largest employer groups urged lawmakers not to approve hikes in insurance premiums for the PBGC; the increases are included in the federal fiscal 2006 budget outline drafted by the House of Representatives. In a letter delivered to House and Senate members late Tuesday, the groups said the premium increase — $18 billion over the next five years — is effectively a tax increase of more than 240%. "Premium increases of this magnitude are an unprecedented and unjustified tax on America's defined benefit plans," according to the letter. "Rising and uncertain premiums will cause employers to exit the pension system, eroding the retirement security of American workers and threatening the ongoing vitality of the defined benefit system." The letter was issued by the American Benefits Council, the ERISA Industry Committee, the American Society of Pension Professionals and Actuaries, the Business Roundtable, Committee on Investment of Employee Benefit Assets, Financial Executives International and the National Association of Manufacturers.
The letter suggested that lawmakers should consider a wide-reaching overhaul of pension funding rules that would also ensure the PBGC's financial stability.
