GOP's Victory Clears Some Roadblocks to Pension
Pensions & Investments (11/02) Vol. 30, No. 23 p.1; Anand, Vineeta
The Republican-controlled Senate is expected to
finalize higher contribution limits on retirement plans and
individual retirement accounts early next year, as well as move
forward with the pension law changes President Bush proposed
after the Enron debacle, which were already approved by the House
in May. Though Groom Law Group partner and former Republican
House Ways and Means Committee tax counsel Brigen Winters says
the Republican victory will facilitate the passage of pension
legislation, industry observers say the slim majority will force
them to push for smaller-scale changes.
The Republicans are also likely to scrap provisions favored by Democrats to cut the
amount of company stock in 401(k) plans, push for rules that let
retirement plan providers give investment advice, and consider
eliminating the 30-year Treasury bill as the benchmark for
determining insurance premiums and the value of pension fund
liabilities. Rather than focus on protecting participants
without changing the system, Republicans are expected to expand
pension and retirement plans, possibly adding 401(k)-style
benefits to standard defined benefit plans, permitting employers
to use surplus pension assets to fund matching benefits, and
allowing employees to work part-time while collecting pension
benefits.
Meanwhile, pension funds did not fare well in some
state votes. In South Carolina, for instance, voters opposed an
amendment that would have let the state budget and control board
manage the South Carolina Retirement System's assets, which would
have expanded the system's stock investments beyond domestic
equities.