On February 7, PLANSPONSOR’s Editor-in-Chief and CEO Charlie Ruffel sat down with these standard-bearers of pension reform – Representatives Rob Portman (R-Oh) and Benjamin Cardin (D-Md) – to discuss the issues, questions and perspectives expressed by our readers. Today, part three.
PLANSPONSOR : Cash balance is an issue evoking real passion right now. Where will the Senate and the House find a middle ground on cash balance?
Portman : I don’t know yet. The bill that we introduced makes what I think are substantial improvements to the cash balance situation by earlier notification, and better and more substantive disclosure, better disclosure, and that’s kind of where our consensus seems to be.
When you go beyond that it does get very difficult – as you know, the Treasury department went back and forth on this in the Clinton years, and in our House version that passed the first time we in essence deferred to Treasury, particularly on the wearaway provisions. The Senate took a little different tactic, putting put down more specific markers, although they never took the floor. So we’ll see. Our proposal I would view as a more consensus proposal, it’s a base.
PLANSPONSOR : How have your conversations with Treasury gone? Can’t Treasury be relied on to instinctively fight the logic of this bill?
Portman : Actually, our conversations with Treasury have gone very, very well. As have our conversations with the Administration, which is very supportive of our effort to increase retirement savings.
PLANSPONSOR : That, presumably, makes for a change.
Portman : It is a change. I have yet to meet with Treasury Secretary O’Neill on this bill, but I hope to do that as soon as tomorrow. Part of this is an education process, and that’s what we are embarking on now. This is a complicated area, and a lot of people’s eyes gloss over when you talk about pensions.
That is one of the problems we have had in this area in the last 20 years – very few public officials wanted to roll up their sleeves and dig into this – it is not viewed as the most exciting thing in the world. I personally think it is very exciting, I really do. I know this legislation will have an immediate positive impact on helping people, and on the markets.
When I first got on the Ways and Means committee, there was nobody on our side of the isle that was interested in pensions, and that’s how I was given the chance as a very junior member to take the lead on this. As a lawyer for small businesses, I had dealt with some of these issues, so I had some prior knowledge, but the opportunity was there. Now the challenge is to educate people as to how important this arena is.
Tomorrow: Part 4 of 4
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