Damon Silvers relishes his role overseeing the AFL-CIO's interests in everything from corporate governance to pension
Damon A. Silvers, associate general counsel for the AFL-CIO, Washington, is charged with overseeing organized laborís interests on corporate governance, pensions and general business law issues ó roles that Mr. Silvers pursues with relish. He has been with the AFL-CIO since 1997 and helps develop pension policy. He has represented the organization in negotiations on a variety of key issues, including those related to the Pension Protection Act of 2006. He also plays a prominent public role, appearing regularly as a witness before Congress and the Securities and Exchange Commission. His colorful quotations also frequently advance laborís cause in the press. Mr. Silvers, who has been active in labor issues since helping organize a union for Harvard University faculty members during his student days in the 1980s, has been a particularly strong advocate for defined benefit pension plans, which he says are essential to ensure that most workers can truly afford a comfortable retirement.
Why is the move away from defined benefit plans to defined contribution plans a concern of the AFL-CIO? Defined benefit plans provide workers with protection in retirement that are vital for real retirement security. Defined benefit plans provide insurance against capital market risk. They provide insurance against outliving your savings. But the most important thing is they are a structure for real employer financial contributions to employee retirement security. The typical DB plan involves employer contributions in the range of 8%-10% of payroll. DC plans involve employer contribution levels net across the workforce of typically less than 3%. The decrease in the private sector in DB plan coverage has meant the loss to working people of all these forms of security which are extremely important, the loss of affordable access to highly skilled professional money management, and most importantly, a real pay cut of something on the order of 5%.
What is your view of the success to date of Pension Protection Act? What needs to be changed and do you anticipate those changes will be made? The Pension Protection Act is a decidedly mixed bag. It has provided some important relief to some pension plans that was badly needed and was well received. The Pension Protection Act has also embodied a fundamentally mistaken conception of pension finance, which is threaded through the entire act ó and itís hard to know exactly how to change it ó which is the notion that pension plans ought to be managed as if they might need to be liquidated at any moment. Thatís simply wrong. The whole point of a DB pension plan is its ability to absorb market volatility over time. One of the worst aspects of that act, in my opinion, was the attempt to allow conflicted investment advice in DC plans. In terms of fixing all these things, Iím not sure whatís going to happen. Thereís been much talk about technical corrections bills. The retirement security crisis, we believe, is well beyond that kind of thing. Congress, in our view, needs to focus on the larger crisis of retirement security for working Americans, which is very dramatic.
Damon A. Silvers
- Current position: Associate general counsel, AFL-CIO, Washington
- Education: J.D., Harvard Law School; M.B.A., Harvard Business School; B.A., Harvard College.
- Other activities: Member of the Public Company Accounting Oversight Boardís standing advisory group and the Financial Accounting Standards Boardís user advisory council.