IAFF Member Promotes Defined Benefit Plans Before Congressional Committee

July 11, 2008 – Will Pryor, a member of Los Angeles County, CA Local 1014 and Chair of Investment at the Los Angeles County Employees Retirement Association, testified July 10 on the importance of defined benefit (DB) pension plans to the retirement security of fire fighters and all Americans in a hearing before the Joint Economic Committee of the U.S. Congress chaired by Senator Bob Casey (D-PA).

Pryor drew on his dual roles as a Los Angeles County fire fighter and as Chair of Investment at the Los Angeles County Employees Retirement Association, which manages more than $40 billion in assets on behalf of 151,000 pension plan participants. At the hearing, Pryor heralded DB pension plans, telling committee members that “local governments support defined benefit plans as a cost-effective measure to pay for a sustainable retirement for employees and to allow for recruitment and retention of a well trained workforce.”

Defined benefit plans are four times less expensive to administer than defined contribution (DC) plans and studies show that DB plans outperform private mutual funds by more than three percent. Pryor described DB plans as “well-funded, diversified investment vehicles that serve their members in all aspects of retirement.” He recommended that the committee protect DB plans in the public sector and revitalize them in the private sector, where conversions to DC plans have become the norm in recent years.

The hearing was called following a series of misleading press articles that have called into question the stability of defined benefit pension plans, alleging that they are a drain on local taxpayers. Senator Casey, who chaired the hearing, called DB plans a “key factor in attracting and keeping excellent teachers, fire fighters, police, social workers and other public employees.” The Senator also expressed serious concern that further conversions to DC plans would “add substantially to the risk we are asking ordinary Americans to take.”

The Joint Economic Committee (JEC) is a bicameral congressional committee that studies policy issues impacting the U.S. economy and advises members of Congress accordingly. The IAFF is continuing to work with the JEC and other key federal agencies to protect fire fighter retirement security.

To read Pryor’s full testimony, click here.