Supporters, Opponents Weigh In On Bush Pension Reform Proposal

House Education and Workforce Chair Rep. John Boehner (R-Ohio) said yesterday that he expects bipartisan agreement on all the major issues of a pension reform bill that will have significant implications for the airlines.

Opponents of the White House proposal are calling some aspects "wrongheaded" and contend it will force more companies into bankruptcy. Boehner said even some of the plan's supporters are concerned about the White House language on yield curves and using credit ratings to assess risk-based insurance premiums.

The Pension Benefit Guaranty Corp. (PBGC) assumed $3 billion in claims from US Airways and could take on $6 billion from United if the airline is successful in convincing the bankruptcy court that it has to shed all its pension plans to reorganize. That could have a "domino effect" on other legacy carriers, PBGC Executive Director Bradley Belt testified. Other airline executives "have publicly stated that they would feel competitive pressure to shift their pension liabilities onto the government" if United succeeds, he said.

Belt added that the President's plan will enhance retirement security, do away with obsolete rules that discourage employers from paying into pension funds during economic upswings and give companies incentives over the long term to fund their pension plans adequately.