H.R. NO.













Urging hawaii's congressional delegation to enact legislation to protect the pensions of employees who are employed by employers that are facing financial difficulties.




     WHEREAS, under current federal legislation, bankrupt employers can legally underfund their employee's pensions by turning them over to Pension Benefit Guarantee Corporation (PBGC); and


     WHEREAS, the federal agency that guarantees private pensions, the PBGC, is already $23.3 billion in debt and with outdated laws, under-funding, and the prospect of additional pension fund defaults, the PBGC is increasingly unlikely to safeguard pensions into the future; and


     WHEREAS, many companies have misrepresented the condition of their pension funds and are contributing insufficient money as a result; and


     WHEREAS, the Employee Retirement Security Income Act (ERISA) requires that promised pension benefits be adequately funded and that pension monies be kept separate from an employer’s business assets and held in trust or invested in an insurance contract; and


     WHEREAS, often times, in the case of a business bankruptcy, the company's executives' pensions are protected, while the employee's pensions are cut; and


     WHEREAS, the current state of the economy will only perpetuate the amount of employers facing difficult times who may be tempted to dump off or discontinue their employee's pensions; now, therefore,


     BE IT RESOLVED by the House of Representatives of the Twenty-fifth Legislature of the State of Hawaii, Regular Session of 2009, that Hawaii's Congressional Delegation is urged to enact legislation that would protect employee's pensions from being depleted due to their employer's financial difficulties; and


     BE IT FURTHER RESOLVED that because pensions are deferred wages and a right owed to employees, it is further urged that such legislation be crafted to give employee pension benefits first priority in cases of bankruptcy and pension plan relief and reform, and that pension fund relief plans should be tailored to the financial condition of the individual pension plan, not the sponsoring company; and


     BE IT FURTHER RESOLVED that under such legislation, executives should do no better than ordinary workers in bankruptcy, unless they can prove to a judge that the survival of the business requires they do better and that their pay is reasonable; and


     BE IT FURTHER RESOLVED that companies not be allowed to misrepresent the condition of their pension funds by using actuarial techniques used to shield companies' performance from the volatility of their pension numbers; and


     BE IT FURTHER RESOLVED that bankrupt companies be able to fully fund their defined benefit plans and make a gradual and orderly transition rather than dumping their employee's pensions on the PBGC; and


     BE IT FURTHER RESOLVED that certified copies of this Resolution be transmitted to the President of the United States, the Majority and Minority Leaders of the United States Senate, the Speaker and Minority Leader of the United States House of Representatives, and each member of Hawaii's Congressional Delegation.























Report Title: 

Congressional delegation; urging employee pension protection