Compliance March 10, 2001

Pension Vote Nears, But Which Version?

October 15, 2000 (PLANSPONSOR.com) - With several versions of H.R. 1102, the pension reform bill, before Congress this week, observers are wondering which version the legislators will accept.
Reported by

The American Benefits Council reports that the issue of whether and to what extent to apply the nondiscrimination tests to H.R. 1102’s catch-up contribution remains a source of intense negotiations between the House and Senate. 

While the Clinton administration continues to signal that it will sign the legislation, there are still signs that it wants potentially significant changes made to the final bill.

On October 6, Senator Jim Jeffords (R-VT) and Senator Ted Kennedy (D-MA) filed an amendment that would add certain ERISA pension reform provisions to H.R. 1102, according to the American Benefits Council. 

Most of these were in the original version of the bill introduced by Representative Rob Portman (R-OH) and Representative Ben Cardin (D-MD), but were taken out by the Senate Finance Committee during their deliberations.

The Jeffords-Kennedy amendment would:

  • Expand the Pension Benefit Guaranty Corporation’s (PBGC) Missing Participants program to include terminating multiemployer and defined contribution plans
  • Reduce PBGC premiums for new and small employer plans to a flat $5/participant for the first five years of operation, with a phased variable premium over the first six years
  • Authorize the PBGC to pay interest on premium overpayment refunds – at the same rate and manner as interest is charged on premium underpayments
  • Simplify the substantial owner benefit rules for terminated defined benefit plans
  • Increase the PBGC guarantee of benefits for multiemployer plans to account for changes in the social security wage index since 1980
  • Allow the Secretary of Labor to reduce or waive civil penalties for breach of fiduciary responsibility, removing disincentives to quickly settle disputes
  • Make parties that are jointly and severally liable for fiduciary violations also jointly and severally liable for the related penalty
  • Modify the rules regarding benefit suspension notices to require such notices be given only to beneficiaries who return to the workforce, since they are often regarded by employees who choose to work past normal retirement as a signal that the employer is trying to force them into retirement.

– Nevin Adams         editors@plansponsor.com  

If you’d like to read the amendment explanation, check out http://www.americanbenefitscouncil.org
/documents/pensiondescription10600.htm

The full amendment is at: http://www.americanbenefitscouncil.org/documents/slcoct5.pdf

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