The lobbying effort aims to change a 2006 pension revision law as part of any economic stimulus plan in a lame-duck session of Congress that begins next week. Companies warn that the current law could force them to tie up large sums of cash they desperately need in the face of a global recession.
Roughly 300 companies and business groups plan to make the request in a letter tomorrow to congressional committees. The authors include some of the nation’s biggest corporate names from a variety of sectors, including Ford Motor, IBM, Pfizer and Verizon Communications.
“Unless the funding rules are modified, they will increase U.S. unemployment and slow our economic recovery,” the letter warns.
On first glance, you have to have some sympathy for the companies that would rather put cash into their operations rather topping up pension funds. It seems sensible that you’d create (or save) more jobs that way. But then you think: these people have been looting their workers’ pension funds for years (with a pen rather than a gun, ever so much more respectable), and during that time did they invest wisely in the operations and create millions of new jobs? Uh, no. They handed over piles of money — their rank-and-file employees’ money — to their shareholders and their top executives. So why would we expect them to do any differently now?
Perhaps there should be a simple deal: companies get to take as long as they like to top up their pension funds, they just can’t issue dividends or stock options until they do. What, you don’t think a lot of companies would take that deal? They’d say having more money in the bank at the end of the day would impair their ability to do business?
Wait, it gets worse. When a company puts money into a pension fund, where does it go? It’s not going to pay out current pensions, that’s already covered. It’s not going into a low-interest savings account — if companies had been doing that, they wouldn’t have been able ot make the rosy projections about rates of return that let them loot the funds in the first place. It’s going into investments, otherwise known as supplying companies with the capital they need to fund their operations, expand, and create jobs. Furthermore, it’s going into investments that the pension funds managers think will yield the greatest return. So if these companies have great ideas that will create (or save) lots of jobs and make lots of money, there’s cash available to do just that. They just have to convince a bunch of impartial money managers instead of writing themselves a blank check with their employees’ money.