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November 21, 1999 Update

The first session of the 106th Congress, which ended on November 19, was somewhat disappointing for NCTR members. Although the pension package (the text of H.R. 1102, the Portman-Cardin bill) was included in H.R. 2488, the tax cut bill, it was vetoed by the President in September. Nonetheless, the package is contained in pending legislation in each House of Congress, which puts it in a good position for enactment in the year 2000.

During consideration of the Bankruptcy Reform Act, S. 625, the Senate approved a multi-purpose amendment that not only increased the minimum wage, but included the pension package. As a related matter, S. 625 also contains a provision that extends the current protection for pension assets, including those in governmental plans, against the creditors of a bankrupt plan participant to all types of retirement arrangements, including IRAs. The threatened amendment by Senator Grassley (R-IA) to cap this protection never materialized. The bill along with the amendments added to it was pending on the floor when the Senate adjourned. The leadership will likely bring it up early in year 2000. The House passed its version of the bill, H.R. 833, earlier this year.

In the House, the Ways and Means Committee a few weeks before adjournment approved H.R. 3081, the minimum wage increase, that also included the pension package. The full House did not act on it before adjournment. Either H.R. 3081 or a re-vamped tax cut with the pension package will likely come before the House at some point next year.

During the recess, we will be working to correct a misperception that the pension package is targeted to high paid workers. We will point out that the package contains provisions that help improve pension portability for state and local government workers and allow them to save more money for retirement. State and local workers are middle-income wage earners. Therefore, the package helps middle income wage earners. In addition, the American Council of Life Insurance has done research to show that most people receiving pensions (both public and private sector) are middle income wage earners.

We will work hard to persuade Congress and the President to support the pension package. Thanks for your usual great support of NCTR’s Washington effort. I’d particularly like to thank those of you who wrote your Senators and Representatives during the year urging them to support the package.

Best wishes for a joyous holiday season.