Petri Bill Would Correct Pension Inequity
Washington, D.C.—Today, U.S. Representative Tom Petri (R-WI), a senior member of the House Committee on Education and the Workforce, introduced bipartisan legislation to correct an inequity in the way survivor benefits are provided by the Pension Benefit Guaranty Corporation.
The Pension Benefit Guaranty Corporation (PBGC) is a federal agency that provides pension fund insurance to ensure that a business's defined benefit pension obligations will be met, even if the company is in financial distress and has to end an underfunded plan. The PBGC covers both single employer plans and multiemployer plans.
In single employer plans, if a covered employee dies prior to retirement, that employee's spouse will receive an annuity, known as a pre-retirement survivor annuity. However, in multiemployer plans, the surviving spouse will only receive this annuity if his or her spouse dies before the PBGC has taken over the plan. If a covered employee dies after the PBGC takes over the employer's pension plan, that employee's spouse will not receive an annuity.
"It's a legal inconsistency, and it isn't fair to those who happen to be in multiemployer plans," said Petri. "There is no reason why the widow or widower of a hardworking employee should be denied an annuity simply because his or her spouse did not die before the plan was turned over to the PBGC.
"Spouses have an expectation of receiving survivor benefits as promised by the employer. We should correct this error—which appears to be inadvertent—so that widows and widowers can receive the benefits they deserve."
Congressman Petri introduced this bill (H.R. 566) with Rep. Rob Andrews (D-NJ), who is the ranking member of the Subcommittee on Health, Employment, Labor, and Pensions. Reps. Petri and Andrews also introduced a similar bill—H.R. 5981—in the 112th Congress.