Friday, Representatives Derek Kilmer (WA-06), George Holding (NC-02), and Anthony Gonzalez (OH-16) introduced bipartisan legislation to eliminate a Washington-created budget gimmick and protect employees and their employers.
Currently, pension insurance premiums that are paid by employers into the Pension Benefit Guaranty Corporation (PBGC) are included in the federal budget and are considered “on-budget.” This creates an illusion that these premiums can be used for general government spending, even though they cannot be allocated to other government programs besides the PBGC benefit pension plans. Furthermore, in recent years, Congress has increased the PBGC premiums as a budget gimmick to off-set increased spending.
The Pension and Budget Integrity Act simply says that single-employer plan premiums should not be counted as an offset for increased federal spending, and ensures that Congress is raising premiums only if and when it is appropriate.
“American workers’ pensions should not be used for Congressional budget stunts,” said Rep. Kilmer. “This bipartisan bill gives American workers the peace of mind that their retirement earnings are protected and ensures that PBGC funds are not subjected to the Congressional budget making process, so we can focus on finding actual solutions to balance the budget.”
“We cannot balance the federal budget while relying on accounting gimmicks,” said Rep. Holding. “Our bipartisan bill will eliminate a gimmick that has allowed congress to raise pension premiums as a way to offset spending on unrelated federal programs. This commonsense approach will force the government to be more transparent and accountable when it comes to the true cost of spending increases.”
“Our federal government needs to take our budget deficits more seriously but unfortunately Congress has used budget gimmicks like PBGC premium increases to justify increased spending in recent years. This legislation will ensure Congress only raises PBGC single employer premiums when it is truly needed and just not when Congress needs a quick band-aid for more spending. This bipartisan bill will help maintain the employer base within the single employer PBGC fund and eliminate a Washington budget trick,” said Rep. Gonzalez.
“The Pension and Budget Integrity Act of 2019 ensures good governance by addressing a budget gimmick and, thus, providing greater certainty for America’s companies that provide important retirement benefits to their employees,” said Aliya Robinson, Senior Vice President of Retirement and Compensation Policy, The ERISA Industry Committee.