Many employers will use money earmarked for job creation and capital improvements to fund their pension plans unless federal lawmakers provide more funding relief, according to a letter sent to President Barack Obama and members of Congress.
“Providing defined benefit funding relief is directly related to improving the economy and employment,” according to the letter from 74 trade associations, unions and other organizations, which was endorsed by groups ranging from the ERISA Industry Committee to the Girl Scouts of the USA, two of the signatories to the letter.
“Unexpectedly large funding requirements will continue to require many employers to lay off workers, close plants and postpone investments in order to fund their pension plans, which are long-term investments,” according to the letter.
In an interview, Kathryn Ricard, ERIC vice president of retirement security policy, said: “The hopes have dimmed for getting the relief in 2009, but we’re anxiously hoping for action in January or February 2010.”
Federal lawmakers approved legislation late last year granting DB plan sponsors some relief from the new, more onerous plan funding requirements in the Pension Protection Act of 2006. But pension industry trade group representatives contend that additional relief is needed.