Request to Sander Levin, Acting Chairman, House Ways & Means Committee - Pension Asset Protection Proposal [4/22/10]

The following letter, endorsed and signed by several Detroit-based retiree associations, including GMRA, and coordinated by the NRLN, was today sent to Sander Levin, the Acting Chairman of the House Ways & Means Committee. NRLN is assuming the lead role in sending similar correspondence to Speaker Pelosi, Reps. Miller and Andrews, and Senators Reid, Baucus and Grassley.

Dear Chairman Levin:

As the President of our respective retiree organizations, we are writing to urge you to include in H.R. 4213, the House Ways and Means pension funding relief bill, language that will protect assets in defined benefit pension plans. The National Retiree Legislative Network has provided proposed language to your Ways and Means staff. As representatives of thousands of your retired Michigan constituents, we believe that companies who take pension funding relief must be prevented from using pension assets for non-pension expenses, such as, lump sum severance payments. Since H.R. 4213 is very focused on asset preservation and the long-term funding security of defined pension plans, adding our proposal is a very integral part of what H.R. 4213 seeks to accomplish.

Actions by companies known as “back door reversions” represent a growing practice to circumvent the Congressional intent against reverting pension assets for corporate purposes. In 2009, the Pension Benefits Guaranty Corp. (PBGC) was very concerned that General Motors used $2.9 billion in pension assets to make lump sum severance payments during 2008. The GM pension plan ended that year with a deficit of $20 billion based on the PBGC's calculations. The Treasury Department's bailout loan program to GM included restrictions on GM's ability to continue to use pension assets for non-pension purposes. Read the entire letter here....