The congressmen and a number of witnesses representing key employer and employee organizations strongly urged Congress to pass the Comprehensive Retirement Security and Pension Reform Act of 2001 (H.R. 10).
“We strongly support H.R. 10,” testified Judith F. Mazo, SVP at the Segal Company, testifying on behalf of the AFL-CIO Building and Construction Trades Department and the National Coordinating Committee for Multiemployer Plans.
The bill expands small business retirement plans, allowing workers to save more for retirement, addressing the needs of an increasingly mobile workforce through portability and other changes, making pensions more secure, and cutting the red tape that has hamstrung employers who want to establish pension plans for their employees.
Intel’s Nanci S. Palmintere, testifying on behalf of the American Benefits Council, noted that H.R. 10 has the support of more than 100 organizations representing diverse groups (her testimony is online at http://www.americanbenefitscouncil.org/documents/palmintere-ltr.htm ).
Also on the schedule were Karen Ferguson, Director, Pension Rights Center, and Richard Turner, Associate General Counsel at American General Financial, testifying on behalf of the American Council of Life Insurers.
Ferguson testified that the legislation may make retirement savings available to more workers but would primarily benefit higher-paid individuals because low-income workers cannot afford to contribute to retirement plans now.
Portman said that providing incentives for small businesses to create pension plans was the most effective way to help low-income workers, claiming philosophical differences with Ferguson’s position.
“I’m tired of folks saying we do nothing for low-income workers, when low-income workers work at small businesses,” Portman said, according to BNA.
Cash Balance Concerns
Ferguson, in written testimony, said that disclosure requirements and a directive to Treasury to study cash balance plans currently in the bill acknowledge, but do not address the “wearaway” affect, by which the benefits of older workers can be reduced after a cash balance conversion. She said the provisions are “little more than a delaying tactic”, according to BNA.
House Education and the Workforce Committee Chairman John Boehner (R-Ohio) pledged support for the Portman-Cardin bill. He noted that cash balance plans were a way to preserve defined benefit plans, which have seen a sharp drop in usage.
Making it difficult for a company to transfer a defined benefit plan to another vehicle may create a situation in which they eliminate the pension plan altogether, he added.
The full text of the hearing testimony will soon be available online at the subcommittee’s Web site ( http://edworkforce.house.gov/schedule.htm ).
– Nevin Adams email@example.com