Senate Drops Off Pension Notions, Heads Home
At a news conference last week, Daschle told reporters that the Senate will craft a compromise bill that melds two currently competing Senate versions . The compromise, not yet written, would still have to be reconciled with a version passed by the House.
Crafting a “Compromise”
Daschle says the final version is likely to promote the ability of workers to diversify company stock holdings after three years. According to Reuters, the bill will also incorporate tougher parts of a Senate Health and Labor Committee bill sponsored by Chairman Edward Kennedy (D-Massachusetts) that would allow plan participants to sue “officers, directors, and public accounting firms” that provide misleading information that harms plan assets, rather than just those defined as fiduciaries.
The bill also would require 401(k) plans with assets “overconcentrated in company stock” to maintain insurance to protect workers in case of corporate wrongdoing, according to the report.
A Kennedy spokeswoman said the senator would push for one measure excluded from the compromise, mandating worker representation on pension plan boards, according to Dow Jones (see Kennedy Introduces Democratic Pension Reform Bill ).
The compromise also excludes a Kennedy provision that would let companies provide company stock as an investment option for plans or as a match to employee contributions, but not both.
Too Far and Not Far Enough
However, when it comes to the House bill, Senate Democrats continue to complain that its diversification approach doesn’t go far enough. They also remain adamantly opposed to the investment advice provisions included in the House version, championed by Representative John Boehner (R-Ohio) (see Advice Approaches Separate Senate, House ).
Last week Senator Richard Durbin (D-Illinois) and Representative William Delahunt (D-Massachusetts) said they plan to introduce a bill that would keep workers from getting pushed to the back of the bankruptcy creditors’ line (see Durban-Delahunt Bill to Bolster Retirees’ Payment Chances ).
Raising a Flag
Meanwhile, the ranking member of the Education and the Workforce Committee, Representative George Miller (D-California), and the ranking member of the Subcommittee on Employer-Employee relations, Representative Rob Andrews (D-New Jersey), have called on Committee Chairman John Boehner (R-Ohio) to schedule hearings on the growing pension crisis as soon as Congress returns after Labor Day.
The two congressmen cited concerns about the financial stability of the Pension Benefit Guaranty Corporation (PBGC) and the assumptions used by employers in projecting pension liabilities in their letter to Boehner .
Statistics from the PBGC show that unfunded pension liabilities for private companies rose to a record $111 billion at the end of 2001 from $26 billion in 2000 – a shift exacerbated by declining stock markets and the PBGC’s use of the 30-year Treasury rate to determine pension fund returns, according to industry experts. The PBGC noted that the previous high for tracked unfunded liabilities was $58 billion at the end of 1995.
« State Street Acquires Part of UK's Gartmore