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September 7, 2000

Legislative Update by Cindie Moore

MORE PROGRESS ON PENSION REFORM!

The Senate Finance Committee unanimously approved the Retirement Security and Savings Act of 2000. (The bill number is not yet confirmed, but it may be H.R. 1102.) The bill contains the portability and other provisions NCTR supports. The House passed a similar bill, H.R. 1102, on July 19, 2000 by a vote of 401-25.

We must temper our enthusiasm with a dash of reality, however. One procedural and three substantive issues may impede final enactment. H.R. 1102 and the Senate bill were considered under different rules (H.R. 1102 under “regular rules” and the Senate bill under “budget reconciliation rules”), so that difference will need to be resolved. In the substantive area, the Senate bill contains tax credits for low and middle income savers in an effort to win the Clinton Administration’s support. H.R. 1102 contains no similar provision. Second, a provision on cash balance plans in the Senate bill will likely draw fire from the Administration. Third, the Administration says that H.R. 1102 and the Senate bill contain increases in pension benefit and contribution limits that disproportionately help higher income individuals.

The full Senate will likely take up the bill during the week of September 18. We’ll keep you posted.