House OKs rewrite of pension funding rules (Reuters)

[Up2Late]

(a Dozen Democrats and the UAW supporting it, what up with that?)

House OKs rewrite of pension funding rules

Thu Dec 15, 2005 07:42 PM ET

By Susan Cornwell

WASHINGTON (Reuters) - Legislation aimed at reinforcing the creaking system of traditional pensions was passed on Thursday by the U.S. House of Representatives, but the White House warned it wanted a tougher bill or it might cast a veto. The measure overhauls funding rules for employer-provided pensions, a fading feature of old-economy companies, and raises premiums companies pay to the federal agency that insures them, the Pension Benefit Guaranty Corp. (PBGC).

Supporters said the bill was needed to fix traditional "defined benefit" pensions, which as a group are $450 billion underfunded and prevent a taxpayer bailout of the PBGC. The agency's $22.8 billion deficit already has been swelled by bankruptcy filings in the airline and steel industries. Analysts say more pension plans from the struggling auto industry are likely to land in the PBGC's lap.

The bill imposes penalties on companies shedding pension obligations in bankruptcy. But Democratic critics said they feared the bill did not do enough to protect workers or save the defined benefit system, which provides a stable monthly paycheck at retirement. It will "actually worsen the crisis," said California's George Miller.

Still dozens of Democrats joined majority Republicans in backing the bill after a major union, the United Auto Workers, endorsed it earlier this week. The House vote was 294-132.

<http://go.reuters.com/newsArticle.jhtml?type=topNews&storyID=10606214§ion=news>
(more at link above)