Chairman Johnson, Ranking Member Andrews and members of the Subcommittee, I
appreciate the opportunity to appear before you to discuss defined benefit pension
plans and their important role in our private pension system.
It is my understanding that the main purpose of today?s hearing is to provide the
Members of the Subcommittee with background information, an overview, useful
perspective and a deeper understanding of the defined benefit pension system, rather
than focusing at this time on specific legislative measures. Accordingly, after providing
brief background relating to the private pension system, my testimony will address the
basic nature of defined benefit (DB) plans and the key differences between them and
defined contribution (DC) plans, will discuss the decline in DB plan coverage and its
causes, and will evaluate DB p lans, including their advantages and disadvantages,
within the context of our private pension system as a whole, including a number of
policy implications. My testimony today will not address specific legislative proposals.
Because I have been asked to address some of these issues in congressional
testimony and correspondence with Congress in the past, certain portions of this
testimony draw heavily on my previous writings (often quoting verbatim), as indicated
specifically in the footnotes to this writte n testimony.