'Do Not Call' Put on Hold

Article excerpt

Millions of consumers registered over 50 million phone numbers for the do-not-call registry; but the law's popularity hasn't saved it from judicial scrutiny. A federal court in Oklahoma has said the Federal Trade Commission doesn't have the authority to enforce the law. That problem has apparently been fixed; within a week of the court's ruling, both the House of Representative and the Senate passed and President Bush signed into law a bill affirming the FTC's authority.

Still, the law will be reviewed for its constitutionality. A federal court in Colorado has ruled that the law is an unconstitutional abridgment of free speech. Noting that the law creates telemarketing rules for commercial calls but not for those of charities or political campaigns, the U.S. Court for the District of Colorado ruled that the law discriminates among different types of speech based on content. Under this interpretation, the telemarketing rules could be considered constitutional if they applied to all solicitation phone calls equally.

In the meantime, the FTC has filed a request with the Tenth Circuit Court of Appeals to allow it to enforce the law while the government's appeal is pending. (See article at page 24.)

The Pension Benefit Guarantee Corporation is concerned that many defined-benefit pension plans are significantly underfunded. Last month, Steve Kandarian, Executive Director of the PBGC, testified to a House Committee that "the total under-funding in the single-employer defined-benefit system exceeded $400 billion as of December 31, 2002, the largest number ever recorded."

The PBGC insures defined-benefit plans for 34 million workers. If a company's plan fails, the PBGC becomes responsible for paying the insured portion of the benefits.

Kandarian said the recent failure of numerous large plans of financially troubled companies left the insurer with a record loss of $11.3 billion in fiscal year 2002--again the largest number ever recorded.

David M. Walker, Comptroller General of the United States, testified that the PBGC "faces exposure to approximately $35 billion in additional unfunded liabilities from ongoing plans that are sponsored by financially weak companies and may terminate."

The underfunding of pension plans reflects in part the state of the economy. A weak stock market reduces a plan's assets; at the same time, lower interest rates increase the present value of a plan's liabilities. …