Consumer Agenda for Retirement Security

Initiative #4: Improve traditional and hybrid pension plans

D. Protect promised future benefits when single employer plans become underfunded.

The Pension Protection Act of 2006 provided for a benefit freeze for any plan whose funding level falls below 60 percent.  This essentially rewards employers, and penalizes employees, for the employer’s failure to fund the plan adequately, and is an effective freeze of the plan.  Moreover, this provision does not necessarily help the plan, since the employer is required, in any event, to fully fund new benefit accruals in the year they are earned.  Congress should repeal the PPA provision. 

Learn more about the other initiatives in the Consumer Agenda for Retirement Security.

Initiative 1: Promote a more adequate and secure private retirement income system.
Initiative 2: Empower workers to promote their own retirement security.
Initiative 3: Improve retirement savings plans.
Initiative 4: Improve traditional and hybrid pension plans.
Initiative 5: Make retirement plans fairer for workers and their spouses.

Print the Consumer Agenda for Retirement Security [PDF].