Pension Reform's Moving
NEW
YORK - A day after a major United Airlines union called for an
unprecedented forensic audit of its pension funds by the federal government,
House Republicans moved ahead with their own legislation for broad pension
reforms that falls short of opening the books of funds that go bust.
The Republican bill, known as the Pension Protection
Act, would require employers to keep their retirement plans fully funded. It was
approved Wednesday by a House subcommittee amid enthusiastic support from AMR's
(nyse:
AMR -
news -
people ) American Airlines and three unions representing that
company's workers.
But the Aircraft Mechanics Fraternal Association, which
requested the United audit yesterday (see "UAL
Union Asks For Pension Probe"), said it would still push Congress to
consider stronger legislation forcing closer examinations of pension plans that
default on their benefits, as happened at UAL (otc:
UALAQ -
news
-
people ) subsidiary United last month.
"It shouldn't be after the fact that we learn, oh, by
the way, there was some malfeasance in this pension fund," said Maryanne DeMarco,
the AMFA's top lobbyist in Washington.
Indeed, some Democrats in Congress were prepared to
press the federal Pension Benefit Guaranty Corp., which takes over failing
funds, to embark on full forensic audits. Sen. Tom Harkin, D-Iowa, a
leading member of the Senate committee on health, education, labor and pensions,
said he'll push for an audit of United's pension fund and consider adding audit
requirements to his own pending legislation.
But a Republican spokesman for the House committee on
education and the workforce, which is expected to vote on the Pension Protection
Act on June 29, said audits were unlikely to find their way into the
Republican-backed bill, despite any Democratic pressure.
"Anybody who's bringing in last-minute pension
proposals is a little bit late in the game," said the spokesman, Kevin Smith.
No fewer than nine pension reform bills have made their
way to Capitol Hill in the wake of United's default, but the Pension Protection
Act has won the most support and momentum in Congress.
"The bill before us simply says, if you offer a
defined-benefit pension plan, you need to put your money where your mouth is,"
Rep. Sam Johnson, R-Tex., a cosponsor of the legislation, said in a
statement, referring to the bill's requirements that all pensions be fully
funded within seven years.
The bill received a boost from yesterday's endorsement
by American Airlines and three labor organizations--the Transport Workers Union,
Association of Professional Flight Attendants and Allied Pilots Association. In
a joint statement, the groups said they support the thrust of the bill, but
asked for a longer time frame to implement the reforms.
"What we don't want to see is legislation that
inadvertently or unwittingly punishes a company like American that has done the
right thing," said Gregg Overman, a spokesman for the airline pilots.
American has maintained much warmer relations with its
employees' unions than other airlines, and is even pressing its case for the
Republican bill in conjunction with union lobbyists. Yesterday American said
it's contributing $75 million to its pension plan to keep the fund solvent.
By contrast with their American Airlines counterparts,
the airline ground workers' call for an audit at United was met with support by
representatives for other airline unions, but some questioned AMFA's timing.
"It's a little bit too late at United," said Tim
McAninley, a spokesman for another American Airlines union, the TWU, who was on
the Hill yesterday to lobby for the Pension Protection Act. "That house was on
fire a year ago."