McKeon: Senate's Credit Ratings Language Likely To Stay.

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Author: Heil, Emily

Employment

Conferees working out differences in the House and Senate versions of pension legislation are likely to modify but retain the outlines of a provision that would require companies with poor credit ratings to put more into their pension coffers, one of the lead conference negotiators said. House Education and the Workforce Chairman McKeon said the conferees are looking at linking the credit rating provision, included in the Senate bill, with language included in both bills that would restrict how companies may use "credit balances," or excess pension payments from previous years. In an interview with CongressDaily, McKeon said negotiators were concerned about putting additional burdens on companies with bad credit ratings since they already may be in a shaky financial position. But he said the credit-balance provisions could apply first, before the credit-rating provisions do. "Then you're talking about how long before it kicks in," McKeon said. Critics have argued that a company's credit rating does not necessarily reflect the health of its pension plan.

Conferees are trying to wrap up work on the long-awaited bill before Congress breaks for the Memorial Day recess. Although negotiators missed one deadline â€" April 15, when companies' first pension payments of the year were due â€" McKeon said he has renewed hope that they will meet their new one. "I can see light at the end of the tunnel," he said. And McKeon indicated that the auto industry might not necessarily get the same pension relief that the Senate bill provides for airlines. Although there has been talk about extending to automakers the airline relief â€" which gives airlines an additional 14 years over which to stretch out their pension obligations â€" McKeon said automakers are more concerned about the changes to pension funding rules in the underlying pension bills. "I met with GM and they said their [pension] plan is already paid up," he said. Talks to reconcile the two chambers' bills began earlier this year. The underlying bills are aimed at tightening rules governing how companies fund their pension plans and shoring up the shaky finances of the Pension Benefit Guarantee Corp., the government's pension insurer, to prevent a potential taxpayer bailout.

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By Emily Heil