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U.S. Pension plan Sponsors Form Coalition to Preserve the Defined Benefit System
Coalition to focus on modifications to proposed age discrimination regulations
WASHINGTON, March 11, 2003 - In response to the U.S. Department of Treasury's recently proposed age discrimination regulations affecting U.S. retirement plans, more than 50 employers that sponsor a wide range of defined benefit plans, including pension equity, cash balance and traditional designs, have joined together to establish the Coalition to Preserve the Defined Benefit System.
Member companies range in size from small organizations to some of the largest corporations in the U.S. They all share a deep concern about misinformation in recent news accounts and the implications of the proposed regulations for retirement plan design and operation and participant benefit security. Coalition members sponsor defined benefit plans covering more than 1,000,000 participants. Watson Wyatt, a human capital and benefits consulting firm headquartered in Washington, D.C., helped organize the Coalition.
"The importance of a strong defined benefit system has never been greater," said Geoffry Kusch, director of global benefits at The Dow Chemical Company, a Coalition member. "Our Coalition is dedicated to ensuring that the final regulations preserve employers' flexibility to provide defined benefit retirement plans that respond to today's mobile workforce. We are encouraging Treasury to issue rules that will allow employers to continue to provide this critical source of retirement income for many working Americans."
The Coalition to Preserve the Defined Benefit System brings a new voice with a specific focus on how the recently proposed age discrimination regulations impact a broad range of defined benefit plans. Ultimately, the Coalition seeks to make the regulations more inclusive of varying defined benefit plan designs - particularly pension equity plans and cash balance - and preserve design flexibility in the defined benefit system while protecting participants' rights against age discrimination. The Coalition hopes to achieve this goal through a comprehensive program of education, research and direct advocacy.
"Many common defined benefit designs and features would be disallowed under the regulations as proposed," said Randall Rakosnik, director of benefits at Fortune Brands, a Coalition member. "The Coalition's goal is to contribute to the development of a sound set of final regulations that support these defined benefit programs and the millions of participants in these programs."
This week, Coalition members will mail a letter to President George W. Bush to share their perspective on the proposed regulations and correct some of the recent misinformation surrounding defined benefit plan designs. In recent weeks the Coalition has begun discussions with the relevant federal agencies and congressional policymakers. The Coalition is also preparing formal written comments regarding the proposed regulations for submission to the IRS this week, as well as oral testimony for presentation at the April 9 public hearing.