The bill, sponsored by Representatives Ben Cardin (D – Maryland) and Rob Portman (R – Ohio),HR 1776 – aka Portman-Cardin III –seeks expanded access to tax-favored savings accounts and replacing the 30-year bond rate when calculating pension liabilities. This would be accomplished through the implementation of a new benchmark based on long-term conservative corporate bond rates to give a more stable basis for the funding, premium, and lump sum calculations of defined benefit plans, according to a news release.
Additionally, the legislation would provide targeted funding relief for multi-employer plans, and will instruct Treasury to update mortality table assumptions to “more accurately reflect the life expectancy of particular worker populations,” while also correcting “glitches” in the pension funding rules. The bill would also allow private sector pension plan employee contributions to be made on a pre-tax basis, as they are currently for public-sector plans.
“The vote today builds on our efforts to strengthen the retirement security of millions of working families who rely on the safe and secure benefits that defined benefit pension plans provide. Among the most important issues in this effort will be replacing the 30-year Treasury interest rate to provide funding relief to beleaguered employers who sponsor these pension plans. We need to ensure that we don’t leave workers and retirees at risk of losing their benefits. I look forward to working with Chairman [Bill] Thomas to strengthen defined benefit plans so that we can enhance pension security for the millions of Americans and give them as many retirement security options as possible.” House Education & the Workforce Committee Chairman John Boehner (R – Ohio) said in a separate statement.
Also contained in the Boehner statement was assurance that his committee, which worked with the Ways & Means committee on certain aspects of the bill, would not hold a separate vote on the legislation.
However, the means to the end were not as simple as a simple “yea” or “nay” from the committee, according to a Reuters report. Apparently, the Republican majority rushed the voice vote while the committee Democrats were in another room hammering out some last-minute changes of their own.
The ensuring brouhaha got the Capital police involved, but no arrests were made. This apparently Republican initiated phone call to the authorities only served to stoke the already red hot embers of Democrat fury, which are now questioning whether the committee action was legitimate.
“There is no question in my mind this is an absolute abuse of power,” said Representative Robert Matsui (D – California) about the rushing of the bill and the fracas aftermath.