>In a letter to their congressional colleagues, US Representatives George Miller (D-California), Bernie Sanders (I-Vermont), Maurice Hinchey (D-New York) and Rahm Emanuel (D-Illinois) quoted an October 10 speech by US Treasury Assistant Secretary for Tax Policy Pamela Olson. According to the letter, Olson told the Practicing Law Institute at a New York meeting that administration officials had decided to avoid a possible prolonged court fight over the controversial retirement plans and, instead, work through the House and Senate.
>The object of the coalition’s efforts were proposed rule changes announced in December 2002 that would permit employers to convert their longstanding defined benefit pension plans to cash balance plans.
“It appears that the Bush Administration has been forced to back down from its proposal to allow the slashing of pension benefits for millions of employees and retirees throughout America,” the four lawmakers wrote.
>Last month, the House approved a controlversial amendment blocking any new government cash balance rules. Sanders sponsored the amendment to a Transportation/Treasury Appropriations measure; Miller and Hinchey signed on as co-sponsors (See Emotion Charged Cash Balance Plan Amendment Passes US House ).
“The proposed rules were extremely controversial because they would allow the pensions promised to older workers to be dramatically reduced, by as much as half,” the letter said. “Tens of thousands of employees and retirees protested these ill-advised regulations, coming in the wake of millions of Americans losing much of their retirement security through the collapse of 401(k) plans and the scandalous behavior of pension managers.”
The four lawmakers said they could accept the Bush Administration effort if it went through normal legislative channels. “If that (cash balance) legislation is developed and considered in a fair and balanced manner, we will have an opportunity to improve the pension security of millions of Americans who just a few days ago faced the imminent loss of billions of dollars in their retirement funds,” the letter said.
A federal judge ruled in August that International Business Machines Corp. (IBM) discriminated against older workers in the calculations used in its conversion to a cash balance plan in 1999 (See Murphy’s Law: IBM Loses Cash Balance Ruling ).