What are your thoughts about the provision in the Senate pension bill that would give special breaks to the airlines?
The Administration opposes special relief for certain industries and companies and supports a consistent set of rules that apply equally to everyone. That would include the airline. What is most problematic about the airline provision is that it extends amortization over 27 years and allows them to use their own assumptions that would be different from those used by other companies. One of the more problematic aspects is the lack of any downside protection for the federal insurance program [that is, the PBGC].
You've spoken of the need to take a company's credit risk into accountant in assessing the overall risk of the pension plan it sponsors. How far along the road does the legislation go toward that goal?
Neither the House nor the Senate go far down that road at all, and that was the Administration's position. The likelihood of a claim [against a pension plan] is best measured by the credit risk of the plan sponsor. When my 11-year-old daughter turns 16 and gets her license, her insurance rate will be higher than mine — and for very good reasons.
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