Gimmick -- a trick or device intended to attract attention or business. Congress frequently will use 'budget gimmicks' to pay for programs, but they hope no one notices. It is time to shine a spotlight on these 'budget gimmicks', especially when one such gimmick threatens retirement security for 31 million Americans who participate in 22,000 pension plans.
Congress has passed legislation that increases the premiums that a company must pay to the Pension Benefit Guaranty Corporation (PBGC) to operate a pension plan from $1 per participant in 1974 to $64 per participant in 2016. Premiums serve a valuable purpose - support the pension system in America. One hundred percent of premiums collected are deposited into a trust at the PBGC that is used to pay benefits to retirees of pension plans the PBGC takes over due to company bankruptcy. If Congress increases premiums that a company must pay, while the premiums go only to the PBGC trust, Congress, on paper, counts the increase as revenue to pay for an unrelated program. This gimmick encourages increasing premiums when they are not needed, just to pay for other government programs. As a result it harms those hard working Americans participating in pension plans and the economy.
If premiums need to rise to ensure the proper support of the pension system - fine - but, premiums should not rise to pay for an unrelated program - the gimmick. An unnecessary increase in premiums only takes away capital that a company could have invested back into the local community to create more jobs.
HR 4955, the Pension and Budget Integrity Act, is bi-partisan legislation that will remove the budget gimmick and ensures that if Congress raises premiums, the increase is not used, on paper, as revenue for an unrelated program. It is time Congress returned to ethical budget procedures and stop with the gimmicks.
Thank you, Congressman Jim Renacci (R-Ohio) for leading the effort to increase retirement security in America.
Will Hansen is the Senior Vice President of Retirement Policy for The ERISA Industry Committee. Will is leading ERIC’s efforts to develop and advocate for retirement and compensation public policies priorities for ERIC member companies. ERIC supports the ability of its large employer members to tailor health, retirement and compensation benefits for millions of employees, retirees and their families.