Price Introduces Bill to Protect Taxpayers, Ensure Pensions

WASHINGTON, DC – Congressman Tom Price (GA-6) today introduced the Employee Pension Preservation and Taxpayer Protection Act of 2005 (EPPTPA) to help protect taxpayer liability and airline employee pensions by providing airlines with new options for funding their pension plans that would help them avoid bankruptcy.

“If a major airline files for bankruptcy, taxpayers lose. Through the Pension Benefit Guaranty Corporation (PBGC) we all pay, employees are out of jobs, retirements are jeopardized, and the economy suffers.”

“Pensions aren’t illusions for employees, they work hard to save for their retirements, and these pensions shouldn’t be able to disappear faster than a David Copperfield magic trick,” Price said. “This legislation protects employees so they may receive the full benefits that they have earned and makes it so airlines don’t leave taxpayers with another multi-billion dollar tab.”

Airlines are struggling to meet required pension payments and are considering filing for bankruptcy, which would lead to their pension plans being assumed by the federal government.

Key provisions in the bipartisan bill include:

• Airlines must meet their obligations. In fact, they have to make sizeable contributions each year in order to reduce their liability and ensure accrued benefits are being paid. Moreover, with the EPPTPA there is NO subsidy from the federal government.

• Taxpayers win. By addressing the airline pension problem in this manner, it ends the likelihood for a taxpayer bailout. Airlines maintain their pension programs and fund these promises without resorting to these liabilities being shifted to the federal government.

• Airline employees benefit because they will receive the full benefits accrued. The measure is also beneficial for the economy because it preserves an important source of jobs and keeps the economy humming.

• The measure establishes a manageable funding burden for the airline carriers. Once a plan is frozen, the unfunded accrued liability must be paid over the next 25 years using stable, long-term assumptions.

• The plan already has the support of the Air Line Pilots Association (ALPA), Delta Air Lines, the Delta Air Lines Retirement Committee (DALRC), and Northwest Airlines.

Corresponding legislation has been introduced in the Senate by Senator Johnny Isakson (R-GA).

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