The Senate Finance Committee on Wednesday approved legislation to free up federal funds to help the $4.4 billion United Mine Workers of America 1974 Pension Plan, Washington, which is severely underfunded. It also approved a package of retirement savings reforms.
The mine workers bill, whose supporters say will have a floor vote by the end of the year, was approved 18-8. It would allow the use of surplus funds from the Abandoned Mine Land Reclamation Fund, which currently goes to the U.S. Treasury. Without the funds, the pension fund could become insolvent and overwhelm the Pension Benefit Guaranty Corp.
Bill supporters note that it has bipartisan support and they are optimistic about Senate approval, which House lawmakers have been waiting for before taking up the measure. “This legislation is long, long, long overdue, and it must get to the president’s desk. When this bill gets to the Senate floor, my hope is we will continue to work together to see there aren’t any delays,” ranking committee member Sen. Ron Wyden, D-Ore., said before the vote.
Also on Wednesday, the Senate Finance Committee unanimously approved a package of retirement savings reforms that would, among other things, allow employers to access open multiple-employer plans, make it easier for them to offer annuities, expand access to 401(k) plans to some part-time workers, and offer startup and automatic-enrollment tax credits for small businesses. Cooperatives and charities would avoid PBGC premium increases, in keeping with their special funding rules.
The Retirement Enhancement and Savings Act of 2016, if enacted, “will provide a number of options that will expand access to employer-sponsored retirement plans for workers in companies of all sizes,” committee Chairman Orrin Hatch, R-Utah, said at the markup of the bill.
It would also require employers to disclose lifetime income calculations on benefit statements. Will Hansen, senior vice president of retirement policy for the ERISA Industry Committee, said the provision is expected to drive up costs to administer a plan and create confusion among participants. “The addition of this language on statements should be voluntary on the plan sponsors’ part and based on the distribution options available to participants,” Mr. Hansen said.