Benefits June 13, 2003

Edwards Calls for Curb on Pension Inequities

June 13, 2003 (PLANSPONSOR.com) - Presidential hopeful Senator John Edwards (D-North Carolina) unveiled his pension-reform proposals during a campaign swing through northern Iowa, calling for curbs on pension abuses by executives.
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In stops in Mason City, Algona and Fort Dodge, Edwards said his proposal would cut down on inequities that allow corporate executives to give themselves huge benefits while cutting pensions for workers – a common employee complaint during the spate of recent corporate scandals.

“Executives at far too many corporations today use tricks and gimmicks to give themselves huge benefits while cutting pensions for workers,” Edwards said . Iowa precinct caucuses next January are considered the first test of strength for candidates for the presidential nomination.

“CEOs who build their companies deserve to be rewarded, but working people deserve to be treated fairly,” insisted Edwards, who often touts his working-class background as the son of a mill worker and a postal employee. Edwards, of course, rose to prominence as a personal injury trial lawyer in his home state of North Carolina.

The Edwards “pension fairness plan” would:

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  • eliminate tax breaks for executive pensions that are disproportionately large compared to rank-and-file pensions
  • require that companies allow older and long-tenured workers to retain their existing pension plans. Edwards said hundreds of companies are converting traditional pensions to “cash balance” plans, in which older workers can lose as much as half of their pensions (See Cash Balance ). Edwards charged that the Bush administration has proposed regulations that would allow conversions without real protections for older workers.
  • prohibit bankruptcy protection for “golden getaways.” Edwards backs a provision in legislation proposed by US Representative John Conyers, (D-Michigan), that would prohibit executives from safeguarding their pensions in bankruptcy-proof trust funds while workers’ pensions are exposed.
  • crack down on executives who use loopholes to avoid paying taxes if the pensions aren’t outside their control and at risk of loss, as is supposed to be the case on most nonqualified deferred compensation programs . The move would save taxpayers $1 billion over 10 years, Edwards said.

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