Pension Benefits Protection Act of 2005

The Pension Benefits Protection Act of 2005 (H.R. 4052) was designed to protect employees when a company decides to convert a traditional pension plan into a "cash balance" or hybrid plan. Under this bill, employers would be prohibited from forcing older or long-term employees into these new plans if the change would result in a lower rate of future benefit accruals.

For workers who are at least 40 years old or have 10 years of service at the time of a plan change, the bill would require employers to give them a choice: they could receive their retirement benefits based on the new plan or the original plan that was in place before the amendment. Additionally, the legislation aimed to prevent "wear-away," a practice where employees stop earning new benefits for a period of time after a plan conversion occurs. Overall, the bill sought to ensure that veteran employees do not lose expected retirement security due to corporate restructuring of pension systems.