Cash-Balance Plan Proposal Generates Controversy Treasury & Risk Management (03/03) Vol. 13, No. 3 p.10; Lindorff, Dave
On April 10, the new cash-balance pension plan guidelines issued by the Treasury Department will be the center of a debate between advocates of workers' rights and businesses. While workers and labor groups contend that cash-balance plans discriminate against older employees, companies see the plans as a way to reduce costs and liabilities. The ERISA Industry Committee, representing companies, contends that the new guidelines will result in numerous lawsuits and lost money due to employee and pension plan disagreements. Congressional members are encouraging President Bush to withdraw the Treasury Department's guidelines in favor of regulations that would prevent companies from cutting the pension benefits of any employees. According to a recent congressional letter, over 300 companies are waiting to convert their defined benefit pension plans to cash balance plans once the guidelines are approved.