In an interview with a Boston radio station recounted in a Reuters news report, Senator Judd Gregg (R-New Hampshire) said he is currently reviewing ways to “push” employee pension plans.
“Defined benefit pension plans, which used to be very popular, essentially say you receive a certain benefit when you retire no matter what the assets are in the fund,” Gregg said in the Boston interview. “Unfortunately those have gone into disfavor, those types of approaches. I do think there are ways to promote defined benefit plans and I hope we can put some ideas on the table in that area.”
Gregg did not elaborate.
Over the past 20 years, many employers have replaced defined benefit plans, which are funded by companies and assure life-long pensions, with defined contributions plans, like 401(k) accounts. The 401(k) accounts are mostly paid for and managed by employees.
According to Reuters, Gregg also said that as a way of restoring investor confidence in the wake of corporate scandals involving Enron and WorldCom, he would try to shorten the vesting period for people to sell company shares in their pension plan.
The Enron collapse demonstrated that a main pitfall in pension law is the holding and vesting period employers are allowed to impose that prevents employees from selling the stock their employers have contributed to their plans.
Some employers do not allow workers to sell the stock they have contributed to employee 401(k) accounts for many years, or until they turn 55 years old.
Gregg’s step up to the top spot on the pension law-writing committee comes as Republicans retake control of the Senate after the recent national elections.