NAM: Groups urge Congress to save jobs by rejecting PBGC premium increases
A National Association of Manufacturers (5/15) press release announces the Tuesday release of a Pension Coalition study “revealing the significant economic impact and job loss that would accompany the proposed billions of dollars in increases to Pension Benefit Guaranty Corporation (PBGC) premiums.” Calling the new premiums “essentially a tax hike,” and with manufacturers “reeling” from increases over the last two years, NAM says that “adding billions more in unnecessary costs will put an anchor on economic growth.” The study finds that the new increases will result in a loss of $51.4 million to the US economy over 11 years, cost an average of 42,000 jobs per year, and that Congress could save 24,500 jobs per year by rejecting additional premium hikes. Reactions to the report voiced the frustrations manufacturers feel with the newly proposed premiums. Owens-Illinois Director of Compensation and Benefits Etta Strong said, “It’s simple: The more money we are forced to spend on PBGC premiums, the less money we have to spend on something else.” Quad/Graphics Director of Government Affairs Patrick Henderson commented, “Congress ought to understand that these premiums are a tax, and the money raised should reflect the true risk and not be used for other spending priorities.” National Association of Manufacturers Director of Tax Policy Christina Crooks said, “Congress and the Obama Administration must turn away from this disguised tax increase.” ERISA Industry Committee Senior Vice President of Retirement Security Kathryn Ricard said, “further increases would only provide another incentive for employers to flee the defined benefit pension system.”
Pensions & Investments Online (5/14) reports 68 companies and business groups sent a letter to Congress on Tuesdaystressing that jobs could be saved “by rejecting further premium hikes.” Members of the coalition that sent the letter “also participated in briefings” on Capitol Hill on Wednesday. Etta Strong is quoted saying, “Every additional dollar that we have to pay in PBGC premiums is one less dollar we are able to put toward our more than 38,000 pension plan participants.”
BenefitsPro (5/14) reports PBGC’s request from congress to raise premiums “elicited strong reaction from the business and trade industries.” A press release from PBGC said that it agrees that the nation’s defined benefit pension system is in need of comprehensive reform.
BNA reports that a proposal to raise the premiums by $25 billion over 10 years is part of President Obama’s fiscal year 2015 budget blueprint. The report indicates the nation would take a $51.4 billion “hit” to gross domestic product from 2013 to 2023 if the new premiums were to be enacted. BNA also points out that the nation will lose 42,000 jobs on average every year, with a high of 67,200 jobs lost in 2017. Letters from the Pension Coalition to members of the House and Senate said that the increase in premiums “could serve as barriers to job creation, investment, and economic growth.”