POMEROY AND WILSON LEAD BIPARTISAN EFFORT TO PROTECT PENSIONS FOR RURAL COOPERATIVES
March 14, 2006
Rep. Earl Pomeroy (D-ND) and Rep. Joe Wilson (R-SC) have been joined by 159 of their colleagues in calling on Congress to recognize the distinct nature of pension plans offered by rural cooperatives in the final version of the Pension Reform bill, currently being worked out between the House and Senate.
"Providing workers with a secure, lifetime income is a benefit that we must protect for all workers including those who work for these co-operatives," said Pomeroy. "As the differences are worked out between the Senate and House bills, it is vital that the provision protecting rural co-operative employees is part of the final bill."
"When Americans depend upon rural co-operatives for necessities like electricity and telephone services, Congress should not impose blanket pension reforms that will cause these organizations to dramatically increase their rates," said Congressman Joe Wilson. "Fortunately, over one hundred and fifty of my colleagues are joining us in urging House Conferees to recognize the unique nature of rural cooperative ‘multiple-employer' pension plans and their lack of risk to the Pension Benefit Guarantee Corporation (PBGC). At a time when energy costs are soaring - higher costs for pension benefits creates a no-win situation for rural American families."
In a rural co-operative "multiple-employer" pension plan, a large number of co-operatives combine their resources and funds into a trust that is dedicated to providing lifetime retirement income to the participating employees. Unlike corporate pensions, the trust would continue to pay benefits to participants even if the employee's co-operative went out of business because the co-ops act as a backstop for each other.
The letter urged the inclusion of a provision in the bill recognizing the special nature of these plans and emphasized that they pose no risk for the Pension Guarantee Benefit Corporation.
"Maintaining a single defined-benefit plan for hundreds of employers permits co-operatives to pool experience and lower administrative expenses," wrote the group. "We are concerned that if provisions…are not included in any final pension reform legislation, these co-operatives may be forced to either reduce pension benefits to their employees or pass along hundreds of millions of dollars in increased pensions costs through dramatically higher rates for necessities like electricity to their member-owners."
Nearly 110,000 Americans, in 47 states, participate in the defined-benefit pension plans offered by rural cooperatives.
Please see the attached copy of the letter.
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"Providing workers with a secure, lifetime income is a benefit that we must protect for all workers including those who work for these co-operatives," said Pomeroy. "As the differences are worked out between the Senate and House bills, it is vital that the provision protecting rural co-operative employees is part of the final bill."
"When Americans depend upon rural co-operatives for necessities like electricity and telephone services, Congress should not impose blanket pension reforms that will cause these organizations to dramatically increase their rates," said Congressman Joe Wilson. "Fortunately, over one hundred and fifty of my colleagues are joining us in urging House Conferees to recognize the unique nature of rural cooperative ‘multiple-employer' pension plans and their lack of risk to the Pension Benefit Guarantee Corporation (PBGC). At a time when energy costs are soaring - higher costs for pension benefits creates a no-win situation for rural American families."
In a rural co-operative "multiple-employer" pension plan, a large number of co-operatives combine their resources and funds into a trust that is dedicated to providing lifetime retirement income to the participating employees. Unlike corporate pensions, the trust would continue to pay benefits to participants even if the employee's co-operative went out of business because the co-ops act as a backstop for each other.
The letter urged the inclusion of a provision in the bill recognizing the special nature of these plans and emphasized that they pose no risk for the Pension Guarantee Benefit Corporation.
"Maintaining a single defined-benefit plan for hundreds of employers permits co-operatives to pool experience and lower administrative expenses," wrote the group. "We are concerned that if provisions…are not included in any final pension reform legislation, these co-operatives may be forced to either reduce pension benefits to their employees or pass along hundreds of millions of dollars in increased pensions costs through dramatically higher rates for necessities like electricity to their member-owners."
Nearly 110,000 Americans, in 47 states, participate in the defined-benefit pension plans offered by rural cooperatives.
Please see the attached copy of the letter.
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