Some senators on the conference committee said details of the provision to grant airlines additional time to fund pensions were blocking compromise, according to Reuters. “It’s reconcilable but it is not reconciled,” Senator Johnny Isakson (R – Georgia) told the news service. “We’re down to some very small details.”
The Wall Street Journal reported that disagreement regarding a provision for investment advice concerns individual retirement accounts (IRAs). House leader John Boehner (R – Ohio) said individuals need more advice to achieve the returns on retirement accounts needed to retire securely. “The people who can give the best advice also happen to sell products. I believe there is a way that protects the interest of the recipients while at the same time allows advice to get into their hands,” he said, according to the WSJ.
Senate Finance Committee Chairman Charles Grassley (R – Iowa) said he is concerned about the conflict of interest and believes an objective mode of advice, such as a product-neutral computer model, is needed. The committee compromised on requiring a model in the case of 401(k) plans, even though modeling for IRAs are more difficult, according to the WSJ. Grassley proposed that investment companies temporarily shift to paying their investment advisers flat fees instead of percentages from sales until a model is found. Boehner rejected this idea.
Disagreement on airline and advice provisions is causing frustration. Trent Lott (R – Mississippi), who is working with the airlines, told Reuters he is losing patience. “If they don’t get it right there won’t be (an agreement) because I won’t sign it,” he said. “There are a couple of areas we’re trying to clarify, and frankly I’m tired of trying to clarify it.”
Tax provisions under consideration are some o ther hurdles to a compromise. Senate aides said committee members considered scrapping a plan to include certain tax breaks in the pension bill and might move them instead as separate legislation in September, along with long-term rollback of the estate tax. The tax provisions being considered would extend expired tax breaks for at least a year for such things as research and development, college tuition and state sales taxes, Reuters said.
The committee is also trying to iron out the wording to clarify the legal status of cash-balance plans.
« Court Denies Former Participant Claim for Fiduciary Breach