House and Senate Pass Crucial Pension Legislation
In response to the financial crisis, The American Federation of Musicians, along with other labor organizations, successfully lobbied the US House of Representatives and Senate for passage of a crucial piece of legislation temporarily adjusting pension requirements for workers, retirees and employers. AFM International President Thomas F. Lee and Director of Government Relations Hal Ponder worked with a number of organizations, including the AFL-CIO, to realize passage of H.R. 7327, the Worker, Retiree and Employer Recovery Act of 2008, which was unanimously passed by both chambers. This bill gives temporary relief from the pension funding rules of the 2006 Pension Protection Act, to give retirement plans some time to recover from 2008 market losses.
Specifically, the legislation will adjust minimum required contributions to single-employer pension funds so that employers can use that cash: to retain jobs; permit some continued benefit accruals in single-employer pension plans that otherwise would not meet their funding targets; and allow multiemployer pension plans to maintain for one more year their current status with respect to funding requirements (i.e., whether they are considered endangered or critical, or neither). The legislation also waives penalties for individuals who choose not to withdraw minimum amounts from individual retirement plans and most types of defined contribution plans. Congress may consider longer-term adjustments in pension funding laws in the new Congress.
This measure will give pension plans that cover AFM members some additional time to deal with the recent shocks to the financial system, rather than forcing action while the market is still extremely volatile.
