Mikulski Says Promises Made to American Workers Retirees Must be Promises Kept

WASHINGTON, D.C. - U.S. Senator Barbara A. Mikulski (D-Md.), a senior member of the Health, Education, Labor and Pensions (HELP) Committee and Chairwoman of its Subcommittee on Retirement and Aging, today spoke up for workers and retirees at the HELP hearing, Pensions in Peril: Helping Workers Preserve Retirement Security Through a Recession.

The hearing highlighted hardships faced by retirees when their pensions are taken over by the Pension Benefit Guaranty Corporation (PBGC). Delays in the PBGC benefit determination process can drag on for years, which can leave retirees uncertain about their future pension benefits and cause severe hardship for families.

It also examined the impact of the economic crisis on pensions. Most companies offering pension benefit plans are facing larger funding requirements because of the economic crisis. Congress is considering temporarily relaxing these requirements to prevent companies from cutting investments or laying-off workers.

Senator Mikulski's statement, as prepared, follows:

"I thank Senator Harkin for holding this hearing today. While we're on the verge of an historic victory to improve health benefits, we also need to stand sentry for worker's retirement benefits. The financial crisis may have started on Wall Street, but this recession certainly has hurt everyone, especially workers and retirees who assumed that if they worked hard and played by the rules, they could retire with dignity and security.

"It has also hurt companies and employers that have been pillars of their community that take pride in how they treated their employees. Today they are struggling to keep benefits in place and keep the lights on. The moral of the story is everyone is facing a challenge. Employers are challenged to fulfill their pension responsibilities and retirees and workers are challenged to find a way to retire securely.

"Congress has poured money into Wall Street so it is not surprising that it's only on Wall Street that we see recovery taking place. But we should be focusing resources where they are needed: on workers who are the backbone of our economy, on the good guy employers trying to do the right thing, and on taxpayers who are responsible if something goes wrong. That's what I hope we can talk about today.

"I have a few simple principles for pension issues. The first is that promises made must be promises kept. But we all know that isn't always easy. So we in Congress must work to help 'good guy' businesses who still offer pensions to their employees. We know that these companies are competing in a global economy where offering a pension is voluntary, so we need to work with these companies.

"We also need to do no harm. My top priority is jobs, jobs, jobs. We need to do everything we can to create and save them. I won't support pension legislation unless it does thst. We need any relief to be targeted, timely and temporary. Comprehensive reform passed in 2005 hasn't even taken full effect. The principles of that reform were sound and we shouldn't undermine them.

"So as our response focuses on the temporary shock to our economy, we need to make sure we don't create permanent consequences. We also need to be bipartisan. This Committee doesn't work on pensions to score political points. We do so because we all have citizens in our states who need us to fight for the retirement benefits they have earned. We have been bipartisan before and I hope that is how we proceed now. And most importantly, we need to act on behalf of workers and retirees, making sure what we do helps them and doesn't help fund golden parachutes or stock buy-backs and dividends.

"We're focusing not only on what we can do to keep pensions alive, but also on what to do about those that have already ended. Senator Brown has his constituents here because their pensions are being slashed as PBGC takes them over. I know all too well about this problem. I worked with his predecessor Senator DeWine to try to address it.

"Like Ohio, my state used to have lots of manufacturing jobs too. They had good pay and good benefits - like a real pension plan. And like the Delphi employees here today, Bethlehem Steel employees in my state had their pensions taken over by PBGC.

"When Bethlehem Steel went into bankruptcy, it broke our hearts. They were our neighbors. They worked all of their lives for their pensions in hot, dirty and often dangerous circumstances. Their hard-earned pensions went to PBGC. But when people started to get their benefits, PBGC made a math mistake. So workers who were forced to take pensions below what they had earned were then told that PBGC had made an overpayment and that they had to pay it back.

"Well, I went to bat because I didn't want my constituents to pay for a mistake PBGC made. But we couldn't change what had already happened. Workers had to pay back part of the pensions they had earned. It was a very serious hardship.

"Dealing with PBGC at the time was really one royal pain. And if I as a Senator was running into bureaucratic rigidity, then I can only imagine how hard it was for these retirees. I know we can't un-ring that bell, but I've continued to ring the alarm that we need a better PBGC. That's something I've worked on for a long time -- a process that is predictable and timely and respectful; a process that is an investment attitude that is humble and prudent.

"But no matter how much we improve the PBGC, Congress needs to try and prevent what happened at Bethlehem Steel and is happening at Delphi from happening in the first place. Everyone is talking about economic recovery, but we're here today because any recovery that is taking place is only happening in the financial pages - not the real world.

"I am outraged with these TARP twerps paying themselves billion dollar bonuses at the same time that retirees are having to pay back the pensions they earned to PBGC. And at the same time that upstanding employers can't get the credit they need and have to scale back benefits or lay-off workers because Wall Street masters of the universe took us into a black hole. So I will make sure that any legislation helps the people that deserve help. Not those who we've already helped and don't appreciate it.

"I do have flashing yellow lights about relaxing pensions funding rules. It's led to trouble before. PGBC has deficits because companies don't pay enough to their pensions when they are healthy and can't pay enough when the PBGC has to assume the plan. For more than a year, companies have said they need taxpayers to sacrifice so they can stay afloat.

"So I have questions about funding relief. How do we know if there is a need? If there is a need, how do we know how much relief to grant? If there is a need, can we meet it without bailing out bad decisions? Can we make sure that only the companies that need the help take it? Can we reward those good guy employers that acted responsibly? Can we make sure that we help workers and retirees, nor corporate executives and Wall Street TARP twerps?

"I won't tolerate another boardroom bailout or let a bill go forward to give taxpayer help to companies that don't need any more of it. But, while I have flashing lights, I also know that many good guy employers are struggling. They want to meet their obligations without risking their businesses or laying off employees who they consider part of their family.

"Like all of us - I wish we didn't have to be here today. Pensions are supposed to be a source of stability. But today, workers and retirees are losing sleep over losing their pensions. And employers are losing sleep over having to choose whether to continue their pension plan or continue their business.

"Our economy is just barely off of rock bottom. We need to make sure pension obligations do no harm and good guy businesses can start to recover. But we also need to make sure that short term relief doesn't turn into long-term pension deficits. I am on the side of employees counting on promised pensions, good guy businesses trying to meet their obligations and taxpayers who shouldn't have to bail out of the PBGC.

"I look forward to hearing the witnesses' ideas about how to help and about how we can work together to strengthen the link between hard work and a solid retirement and how to help our businesses get to recovery."

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