Newspaper article THE JOURNAL RECORD
Private Pension Plans Often Aren't There When Needed/congress Told
In that same period, other companies have foisted upon the government 734 pension plans with more than $3.7 billion in promised but unfunded pension obligations.
The phenomena result from pension fund terminations either by corporations in order to lay claim to the surplus assets of overfunded plans or by government insurers to protect the benefits of workers in insolvent plans.
In both cases, hundreds of thousands of current and future retirees are being hurt, Congress was told Tuesday, with warnings that what has happened in the past seven years is just the tip of the iceberg.
If what Labor Secretary William E. Brock called the ``two disturbing trends'' continue, millions of retirees can anticipate losing one-third to one-half of the benefits they had expected would protect them in their old age, according to a study by his department.
Testimony of more than a dozen witnesses Tuesday before House and Senate labor subcommittees indicated those trends will continue unless Congress changes the law to force underfunded plans to improve their solvency and then addresses who should enjoy the excess assets of the overfunded plans.
``The situation cries out for reform,'' said Sen. Howard Metzenbaum, D-Ohio. ``Millions believed the pension promises made by their employers. They assumed there were laws to protect them. Sadly, they were wrong.''
To understand the enormity of what is at stake requires only a cursory glance at the number of people and amount of money involved:
- A total of 38 million workers plus their spouses, or roughly one-fourth of the nation's population, look to 110,000 private and voluntary defined-benefit pension plans to help take care of them in retirement. …