“I don’t think there is any risk at all that pension provisions will be removed,” Representative Ben Cardin (D-Maryland) told a gathering of plan sponsors in Washington, DC yesterday. In fact, Cardin and co-sponsor Representative Rob Portman (R-Ohio) said they are “not finished yet.”
The two co-sponsors of the Portman/Cardin bill that bore their name prior to its assumption into the Economic Growth and Tax Relief Reconciliation Act of 2001, spoke at a seminar sponsored by Hewitt Associates and the US Chamber of Commerce.
The so-called “sunset” provisions of the tax reform bill mean that many of the provisions expire come 2010, in the absence of legislation creating a more permanent solution. That was one of the “trade-offs” for being included in the tax bill, alongside its relatively prompt passage. The day the bill was signed into law, president Bush told Cardin: “you were right to get the pension changes in now, ” the congressman said.
Still, while plan sponsors can draw comfort from Rep. Cardin’s remarks, Representative Portman reminded the audience that “permanent is only as long until Congress meets again.” Cardin noted “we’ve had more fights with implementing the laws we thought we passed than we did to pass the laws in the first place,” referencing prior legislative efforts.
“To Do” List
Not content to rest on their laurels, the congressmen said their “to do” list still includes:
- Participant education, particularly with the continued trend toward defined contribution, participant-driven programs
- Minimum required distribution rules – Cardin noted “it isn’t right to require those aged 70 1/2 to take out as much as they are required to.”
- Dealing with Social Security
In addition, Portman noted that they planned to follow through with changes to the Employee Retirement Income Security Act (ERISA) that were in the original bill, but set aside because they didn’t have tax implications, and thus couldn’t be included at that time. Portman referred to the exclusions as “Byrd droppings,” a colloquial term referring to West Virginia Senator Robert Byrd credited with the procedural rules which limit these inclusions.
This new package could be done this year, if the congressmen have their way. Consequently, Portman urged attendees to forward suggestions and comments on the current bill, as well as other needs.
The nation’s abysmal savings rate is clearly a concern of both men, who have worked together for some time to make this particular bill a reality. In fact, the decline in savings in the midst of “the hottest economy in history” clearly served as an inspiration.
“Part of the responsibility lies with Congress,” Cardin said, “which tried to protect individuals, but instead discouraged employers from offering the programs,” referring to the labyrinth of nondiscrimination rules and restrictions.
Both noted that critics continue to believe that pension reform was simply a way to enrich employers at the expense of workers – a point neither accepts. Portman told the plan sponsor audience “you are key to making this work – and proving us right.”