WASHINGTON, March 21 /PRNewswire-FirstCall/ -- Watson Wyatt Worldwide is urging Congress to prevent the Department of Energy (DOE) from resurrecting a policy that undermines government contractors' ability to provide guaranteed retirement benefits to their workers and conflicts with long-standing public policy supporting employer-sponsored pension plans.
In April 2006, the agency announced it would no longer reimburse contractors for expenses associated with defined benefit pension coverage for new employees. Following criticism from the public and members of Congress, the DOE announced in June 2006 that it would put the policy on hold for a year and consult with key stakeholders. In recent weeks, agency officials have been briefing contractors on the policy and indicating it will be implemented.
"We are very concerned that the DOE is attempting to implement this dangerous policy once again," said Gene Wickes, global director of benefits consulting at Watson Wyatt, a leading global consulting firm. "Congress passed comprehensive pension reform designed to help preserve employer- sponsored pension programs, so it is unbelievable that a U.S. government agency would pursue a policy that could threaten the retirement security of American workers."
Watson Wyatt criticized the policy last year, warning that it undermines contracting employers' ability to provide guaranteed retirement benefits to their workers and sends a negative signal about employer-sponsored pension plans overall. The policy denies employers the flexibility they need to design retirement plans that best suit the needs of their workforce - whether that involves defined benefit plans, such as a traditional pension, or defined contribution plans, such as a 401(k).
Wickes said: "Congress should not support the DOE's pension policy, and we hope there will not be such a significant change in U.S. pension policy. The federal government should not dictate the types of plans that employers can and cannot offer to employees, especially by prohibiting guaranteed pensions. Ironically, federal employees continue to receive such benefits."
More information about the policy the DOE proposed in 2006 can be found at http://www.watsonwyatt.com/news/press.asp?ID=15983.
About Watson Wyatt Worldwide
Watson Wyatt is the trusted business partner to the world's leading organizations on people and financial issues. The firm's global services include: managing the cost and effectiveness of employee benefit programs; developing attraction, retention and reward strategies; advising pension plan sponsors and other institutions on optimal investment strategies; providing strategic and financial advice to insurance and financial services companies; and delivering related technology, outsourcing and data services. Watson Wyatt has 6,000 associates in 30 countries and is located on the Web at http://www.watsonwyatt.com/.