RENEE MONTAGNE, host:
Congress is working to make sure other workers don't lose their pensions. Last week, a House committee approved a bill that would overhaul a government insurance program that guarantees private pensions are paid. Joining me to discuss the bill is Sylvester Schieber. He is director of US benefits consulting at Watson Wyatt, a human resources consulting firm in Washington, DC.
Hello.
Mr. SYLVESTER SCHIEBER (Watson Wyatt): Good morning.
MONTAGNE: How would this bill protect workers' pension benefits?
Mr. SCHIEBER: It would require that employers lay aside money as benefits are being earned. One of the problems we have today is that there was a flaw in the current regulations that allowed employers to accrue these pension benefits that were going to be paid down the road and not lay aside money at the time they were funded. And then when the companies got into financial problems, they could not pay the benefits that were previously promised.
MONTAGNE: So basically, they didn't put the money in the bank.
Mr. SCHIEBER: They didn't put the money in the bank when the benefits were being earned.
MONTAGNE: Requiring employers to put aside enough money to pay their pensions sounds like common sense. But what is the flaw in that?
Mr. SCHIEBER: Well, it is commonsensical and, in fact, the vast majority of employers have been funding their pensions as they've been earned, and most of them are in pretty good shape. Some of them have a little bit of underfunding, but it's very minor compared to the total obligations. The problem has been that some companies--and it's a relatively small number of companies--have accumulated very significant obligations that weren't funded.
MONTAGNE: And other than airline workers, who else should be worried then about their pension benefits?
Mr. SCHIEBER: Well, you can call your employer and ask them what percentage of your benefit is funded, and any plan that is not 70, 80 percent funded, workers should be quite concerned.
MONTAGNE: Just a last question, how likely is this proposed overhaul of pension insurance to actually make its way into law?
Mr. SCHIEBER: We almost certainly will see legislation this year to try and correct these problems. I think going forward, the system will be more secure than it has been in the past.
MONTAGNE: Thanks very much.
Mr. SCHIEBER: Thank you.
MONTAGNE: Sylvester Schieber of the human resources consulting firm Watson Wyatt.
This is MORNING EDITION from NPR News. I'm Renee Montagne. Transcript provided by NPR, Copyright NPR.
