Congress responded to a Chicago bankruptcy court decision that allowed United Airlines to transfer $6.6 billion in pension liabilities to the Pension Benefit Guaranty Corp., Washington.
Two Congressmen, Reps. George Miller, D-Calif., and Jan Schakowsky, D-Ill., introduced legislation, H.R. 2327, that would impose a 6-month moratorium on pension plan transfers to the PBGC.
Miller said in a statement that unless Congress takes action, other companies may follow suit.
The decision had raised concern that Congress might overreact and impose stringent funding rules that would lead many companies to drop their defined benefit plans.
The American Benefits Council voiced concern about a potential backlash to stringent funding regulations. The ABC “has consistently advocated for an approach to reform that stresses predictability–not volatility–for pension plan sponsors,” said ABC President James Klein.
“While it is prudent to consider changes to the pension funding regime, such considerations must be made in the context of a comprehensive pension reform package that aims to promote and strengthen defined benefit plan sponsorship,” Klein said. “Only by encouraging employers to stay in the game will we prevent losses like those suffered by United Airlines employees and their families and by the PBGC today.”