House/Senate Pension Conference Bill may be ready for vote by April 7th

[papau]

April 7th is the only the official target as they plan to complete the conference and bring a final bill back to the House and Senate for a vote by April 7th, immediately prior to the Easter recess. The informal discussion of a "more real" July target is justified by "concern for the number of differences between House and Senate", and the threat of a veto from the White House (but I suspect any post-April 7th needed time will be caused by a tight fund raising schedule).


Last Friday the Senate appointed its conferees to the pension reform legislation conference. The Senate named 16 conferees (9 Rs and 7 Ds): Health, Education, Labor and Pensions Committee Chairman Michael Enzi (R-WY), Finance Committee Chairman Charles Grassley (R-IA), Judd Gregg (R-NH), Johnny Isakson (R-GA), Mike DeWine (R-OH), Orrin Hatch (R-UT), Trent Lott (R-MS), Olympia Snowe (R-ME), Rick Santorum (R-PA), Edward Kennedy (D-MA), Max Baucus (D-MT), Tom Harkin (D-IA), Jeff Bingaman (D-NM), Barbara Mikulski (D-MD), John Rockefeller (D-WV), and Kent Conrad (D-ND).

The House appointed its conferees yesterday. They include three from the Ways and Means Committee (2 Republicans and 1 Democrat): Chairman Thomas (R-CA), Dave Camp (R-MI), and Ranking Member Charlie Rangel (D-MI) There are eight conferees from the Education and Workforce Committee (5 Republicans and 3 Democrats): Majority Leader John Boehner (R-OH), Chairman Buck McKeon (R-CA), Sam Johnson (R-TX), Pat Tiberi (R-OH), John Kline (R-MN) and Ranking Member George Miller (D-CA), Donald Payne (D-NJ), and Robert Andrews (D-NJ).

THE BIG QUESTIONS TO BE ANSWERED:

Should Investment Advice provision follow House which allows affiliated financial services providers to provide advice to qualified plan participants in plans for which they provide products or services.

Should cash balance replacements for current defined benefit pension plans, so called hybrid plans, have the Senate mandate requirements for future conversions, or the no mandates that is the House bill. And should the bill have "comprehensive relief for already existing hybrid plans" - as in reversing the IBM loss in Court on their cash balance conversion.

Should the final bill have the Senate provision that clarifies that retirement plans maintained by tribal governments will be treated as governmental plans under ERISA and the Code.

The must have technical decisions needed to pay the 2006 first quarter quarterly estimate tax are being held up by these important questions!



Senate HELP Committee Chairman Mike Enzi is the Chairman of the conference. Below you will see his opening statement.

Wednesday, March 8, 2006

Statement of Michael B. Enzi, Conference Chairman

Senate Health, Education, Labor, and Pensions Committee, Chairman

Conference Committee of the Senate and House on
S.1783, the Pension Security and Transparency Act
And
H.R.2830, the Pension Protection Act

“The first meeting of the conference committee is called to order. Welcome to all the conferees. The Chairmen and Ranking Members will give brief remarks and all others may submit their statements for the Record of the Conference.

This is an important and complicated bill. While it has several contentious components, there are many provisions that are not controversial. I am counting on my colleagues to work through these issues swiftly. The schedule we are setting out today is ambitious, but not impossible. We should conclude all deliberations by March 31, 2006 and have the conference report ready for final votes by April 7, which is just prior to the April recess period. We can finish the conference if we will work across party lines.

This legislation is leftover business from last year and it needs to be enacted into law. Employers, like taxpayers, need certainty. They need to plan and budget. They need to know what the rules are. Workers need certainty too. They need to know that their retirement money, the money they have earned, is in the bank. They need to plan their lives and budget for their retirement.

Overall, we have three primary objectives for this conference: our first objective is to get more money into retirement plans. The bill before will help to give greater certainty to the use of defined benefit plans and will provide more options for companies to offer retirement plans for their workers.

Just like workers and their families, the government needs to plan and budget too. But this can't happen when shaky retirement plans with dwindling cash reserves dump their responsibilities on the federal government.

Clearly, our second objective is to shore up the federal pension insurer, the PBGC. Last year, we took steps to address this by raising the premiums employers are required to pay to the pension insurance agency. These premium increases will provide the PBGC with an additional $3.6 billion in resources over 5 years. In this conference, we will complete the job of making the PBGC more solvent. Bear in mind that when we improve the funded status of plans, we are improving the financial integrity of the PBGC.

Since ERISA was enacted in 1974, federal retirement laws have given Americans security--by guaranteeing that their pensions will be paid, even if it is by the PBGC. These laws need to be strengthened, so that Americans can have the comfort of knowing that their retirement check won’t bounce. Providing Americans with this security is a high priority for the conference.

This brings me to our third objective and that is to "do the right thing". We should not enact legislation that is so strict that it would kill off the defined benefit pension system. We need to strengthen and protect the estimated $2 trillion dollars currently in the defined benefit pension plan system. Over $120 billion dollars in retirement money is paid out of these plans to retirees annually. We need to cure the problem of "pension deficit disorder." But we must not harm these pension plans in the process.

It is clear that the future of the pension system is with the so-called “hybrid pension plans”. But these hybrid plans need certainty about the rules that govern them. The HELP Committee heard compelling testimony supporting clarification of the hybrid plan design. I look forward to working with conferees on this important issue.

The bill also takes steps to provide certainty and security for workers in multiemployer retirement plans. This is a deeply troubled area in pension law. In fact, Senator Kennedy and I requested financial information from a number of multiemployer plans, and most of the plans didn't even give us the courtesy of a response. How can Congress provide retirement security for these workers when we don't know the magnitude of the problem? This bill is a first step to open up the multiemployer pension system. But it should mark only the beginning of our oversight.

In conclusion, I would like to reiterate that we need to complete our work quickly. I recognize that this will be hard on the members and the staff, but doing nothing is even harder for our nation's retirees. Already, we have had too much delay. Now we must get the job done.

I would like to turn to Chairman McKeon for any comments he would like to make, then I would like to turn to Mr. Miller of California, then to Chairman Grassley, Senator Baucus, Chairman Bill Thomas and last, but not least, Mr. Rangel. I would like to invite the other conferees to submit any statements they have for the Record.”