Some folks get a nice gold watch when they retire. Rep. J.J. Pickle, D-Texas, might get pension reform.
Rep. Pickle will retire this year after 31 years as a Democratic House member from Austin. As chairman of the House Ways and Means Subcommittee on Oversight, pension reform has been one of his priorities.
"This is his last year, and he would probably like to go out with this under his belt. It would be difficult for the members in the House to deny this to him," said Mark Ugoretz, president of the ERISA Industry Committee, Washington.
Rep. Pickle's bill, the Pension Funding Improvement Act of 1993, which was introduced last January, has been on a back burner. The bill would require sponsors of underfunded plans to fund at least 90% of benefits and would prohibit sponsors of underfunded plans from increasing benefits.
"Mr. Pickle will work quite hard on getting this through," a subcommittee staffer said.
The issue has been covered in six subcommittee hearings since 1991. Rep. Pickle also has supported a Clinton administration bill, the Retirement Protection Act of 1993, but he wants to add the prohibition against increasing benefits in underfunded plans.
Meanwhile, Sen. Howard Metzenbaum, D-Ohio, won't be frittering away his last year in office, either. He's planning to introduce a broad pension reform bill late next month.
Sen. Metzenbaum, chairman of the Senate Labor and Human Resources Subcommittee on Labor, is retiring this year as well. After receiving intense pressure from the business community last June, he withdrew legislation intended to overturn the Supreme Court decision in Mertens vs. Hewitt Associates. In Mertens, the court said participants could not sue non-fiduciaries such as actuaries, accountants and lawyers, even if these groups participated in a fiduciary breach.
Sen. Metzenbaum's new bill is expected to allow monetary damages for participants.
The Department of Labor has said the Mertens decision, as it stands, has impinged on the department's enforcement abilities, while the business community has said Sen. Metzenbaum's attempt to overturn the decision would increase potential liabilities for fiduciaries.
The bill also would increase benefit coverage to all employees; currently, Section 410(b) of the Internal Revenue Code, which was added by the 1974 Employee Retirement Income Security Act, allows plan sponsors to exclude up to 30% of the workforce in all pension plans.
In addition, the bill would give plan participants more information on their benefits, and change funding rules for underfunded plans.
"We're trying to highlight and eliminate weaknesses we know of in the system," said Michele Varnhagen, chief counsel to Sen. Metzenbaum. "There's no reason that if your employer has a plan you should not be getting something from it."
Sen. Metzenbaum, who will retire after 17 years in the Senate, will be in classic form, putting holds on bills and using other legislation as leverage to get his reforms enacted, Ms. Varnhagen said.
"Sen. Metzenbaum has continually battled the plan sponsor community and has been an adamant spokesman for his cause, and you have to give grudging respect to that," said James Klein, executive director of the Association of Private Pension and Welfare Plans, Washington.
But no matter how hard these two legislators push for their respective pension reform agendas, both might get sidetracked depending upon what happens with health care reform.
Some observers said the debate over the much-publicized changes in health care might use up all of the discussion time on both floors this session, leaving little room for other bills to be considered.
Still, some doubt anything will get accomplished regardless of what happens with health care. Jim Kaitz, vice president of government relations for the Financial Executives Institute, Washington, said there is little incentive to pass pension reform legislation this year.
"Unions don't want it, companies with underfunded plans don't want it," Mr. Kaitz said. "It's a tough political issue before an election."
If time runs out, new members of Congress will need to emerge and become the leaders in pension reform.
In the Senate, some are saying Paul Wellstone, D-Minn., and Bill Bradley, D-N.J., could become those new leaders.
In the House, observers have dropped a host of names, including Gerald Kleczka, D-Wis.; Bill Brewster, D-Okla.; Andrew Jacobs Jr., D-Ind.; Fortney "Pete" Stark, D-Calif.; and Benjamin Cardin, D-Md.
But getting any new representatives or senators to pick up where Sen. Metzenbaum and Rep. Pickle leave off will take time, observers said.
"These are two very strong personalities," said ERIC's Mr. Ugoretz. "Someone else will come in and do something else. I don't think you can talk about Metzenbaum and Pickle and talk about replacement."