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Congresswoman Maxine Waters

Representing the 43rd District of California

Motion to Insturct Conferees on H.R. 2830, Pension Protection Act of 2005

August 6, 2009
Floor Statement
Rep. Maxine Waters [D-CA]: Mr. Speaker, I rise in strong support of the Motion to Instruct Conferees authored by my California colleague, Mr. GEORGE MILLER. While the underlying bill, H.R. 2830, purported to strengthen the defined benefit system, the numerous technical changes that were proposed for the funding rules that apply to defined benefit plans will change how the liabilities under the pension plan are valued and the accounting for contributions made. First of all, let me say that I fully opposed the bill that passed on December 15, 2005 by a vote of 294 to 132 because it would cause millions of Americans to receive reductions in their pension plan. Furthermore, its provisions would facilitate the freezing or complete termination of pension plans by corporate boards.

Under the so-called Pension Protection Act, if an employer funds a tax-qualified pension plan under 80 percent, then the covered workers cannot receive benefit increases, COLAs, or lump sum pension payments. Executives can continue to provide themselves lavish benefits under non-qualified plans without any restrictions. Only if funding drops below 60 percent, are executives prohibited from transferring corporate assets to executive compensation.

This Motion by the Gentleman seeks to fix a major source of these potential dangers to our hard-working constituents. It ensures that corporate heads do not profit at the peril of their workers--they will have to adhere to the same retirement rules as do their employees. The situation surrounding Exxon Mobil's outgoing CEO, R. Lee Raymond whereby he was slated to bail out of the corporation with a "golden parachute" of a $98 million in lump sum pension payment is a slap in the face of the notions of corporate ethics and duty to employees and shareholders. Raymond's total retirement package, including stock options and severance pay--is valued at $400 million. This is just one more example of out of control executive pay at American companies.

As the Motion to Instruct states, Conferees should craft its report to apply the same benefit restrictions between workers and CEOs and use the earlier effective date of the House bill, December 31, 2005.

Mr. Speaker, in my state of California, seven oil companies control more than 95 percent of the state's refining capacity. That translates to thousands of workers whose benefits will be jeopardized by this bill. We need to force corporations to institute fairness in their pension programs where employees are not treated like animals.