In his recent press release, Mr. Gore's rhetoric sounds distinctly, and alarmingly, familiar. I pose the following comments for your consideration:

1) It has always been true that plan sponsors have "reduced" future benefits, for a variety of reasons. The most common, in my experience, has been a projected inability to continue to meet minimum funding levels, and usually resulted in a partial or complete termination of the DB plan.

2) Unless I missed a recently signed law, no plan guarantees future benefits. Benefits do not become payable until certain conditions are met, and the provisions of the plan in effect at the time of the termination of employment, with grandfathering, are the legal definition of the benefit.

3) It comes as no surprise to those of us in the industry that future benefits for older employees cost more to provide. I am personally chagrined to see a candidate for President use scare tactics in this fashion.


[Edited by Dave Baker on 07-16-2000 at 11:56 PM]

It's so hard, in a sound bite, to distinguish between cutbacks of accrued benefits vs. reduction or elimination of future benefits.

If employers and planners could come up with something concise and positive to express it, I suspect we could eliminate some of the perceptions of injustice arising from an employer's decision to reduce the additional benefits in the future for some or all employees. About the best anybody's come up with in the cash balance scenarios is "wearaways," which doesn't help much.