Pension Reform Vote on Friday?

October 26, 2000 ( - Pension reform continued to creep ahead yesterday as the President and Speaker of the House exchanged letters outlining their respective priorities - and concerns - on a bill that could have a dramatic impact on qualified plans. The legislation is still expected to come up for a vote on Friday.

According to the American Benefits Council, Capitol Hill leaders have decided to apply the non-discrimination rules to catch-up contributions, as per the House version of the legislation.  This could significantly limit the impact of this provision.

The Senate’s tax credit for low-income savers has also reportedly been set aside.

In a letter to House Speaker Dennis Hastert  President Clinton said he supported the pension proposal, but wanted to make sure that:

  • employer-provided pensions for workers are not harmed
  • there are “meaningful protections” for workers affected by cash balance conversions
  • there are progressive savings incentives for low- and moderate-income workers

The American Benefits Council also notes that the tax bill may include health provisions to provide further tax deductions for health insurance, long-term care and possibly an expansion of Medical Savings Accounts (MSAs).

Republican leaders are pushing for an “above the line” deduction for long-term care insurance, while the Clinton Administration prefers a tax credit for long-term care – and is opposed to MSAs.

– Nevin Adams