>The Chamber of Commerce of the United States of America, in a letter to House of Representatives Education and Workforce Committee Chairman John Boehner (R – Ohio), said plan sponsors need Congressional action to ” eliminate the escalating liabilities associated with [cash balance] plans” that has been cause by the “absence of statutory guidance.” “These circumstances have unduly increased the risk of sponsoring such plans,” the Chamber said.
>To assist Congress, the group provides a policy and position statement of the Chamber’s legislative goals in effecting cash balance reform. Specifically, the position statement provides three goals for Congress to shoot for to eliminate further plan sponsor confusion surrounding cash balance plans:
- Congress must state that the hybrid plan design is a legitimate and legal plan design.
- Plan sponsors that have made cash balance and hybrid plan conversions need assurance about the validity of those conversions.
- The whipsaw issue must be resolved to allow plan sponsors to continue to provide generous benefits.
>The Chamber of Commerce’s letter comes after the Education and Workforce Committee held hearings earlier this month about the need for clarity surrounding cash balance plans to provide an avenue for retirement funding (See Witnesses Tell Congress About the Need For Cash Balance Reform ). Congress has suddenly found the yoke of cash balance reform balanced squarely on their legislative shoulders. On June 15, the Treasury Department and the Internal Revenue Service (IRS) put out a release to say they were deferring to the US Congress for regulations on cash balance plans, withdrawing their proposed regulation on the plans and plan conversions. In that release, the agencies said the regulations were being withdrawn to “provide Congress an opportunity to review and consider a legislative proposal on cash balance plans that was included in the Administration’s Budget for Fiscal Year 2005” (See Cash Balance Regulations Off Again….Again ).
A copy of the Chamber’s letter is available here .