On the recordSeptember 17, 2014
as chairman of the Health, Education, Labor, and Pensions Committee, the pension community approached me with their concerns that the Pension Benefit Guaranty Corporation was interpreting section 4062(e) of the Employee Retirement Income Security Act of 1974 too broadly. That provision was intended to protect pension plan participants in the event of a cessation of operations at a facility. However, the pension community was able to provide substantial evidence that the corporation's enforcement efforts were out of line with congressional intent to such an extent that section 4062(e) had become a major impediment to businesses' efforts to restructure. After a thorough review of the situation and consultation with employers, employees, retirees, and the Obama administration, it became abundantly clear that enforcement efforts under section 4062(e) were failing to protect either pensions or the corporation. Consequently, I worked with the ranking member, Senator Alexander, on a new approach that we introduced as S. 2511. That legislation, which passed out of committee on a unanimous vote, will restore the original intent of section 4062(e) by clarifying the types of cessations of operations that trigger downsizing liability. The legislation will give plan sponsors certainty with respect to their obligations, and it will also ensures that participants are protected when workforce reductions signal that the ongoing viability of a plan sponsor is in question.…
