WASHINGTON - Pension matters left unfinished by the 103rd Congress stand the same chance of passage no matter which party controls the new Congress, experts say.
Whatever the makeup of the House and Senate, there is likely to be strong interest in such issues as strengthening the financial condition of the Social Security trust funds and measures designed to ensure retirement income security of Americans.
Pension-related bills also will be helped by the fact they are not, by and large, emotionally charged issues.
"They are not mainstream issues. They are issues no matter who is in control," said Gerald L. Uslander, principal in the Washington office of William M. Mercer Inc.
Where the Democrats and Republicans differ, however, is over pension fund investments in socially motivated programs. The Clinton administration and some Democrats want to encourage pension funds to invest in infrastructure projects. Republicans, for the most part, oppose such measures.
"If the Democrats remain in majority, you could continue to see a focus to make pension funds do more. You could see a real big push on economically targeted investments," said Gina Mitchell, a lobbyist with the Financial Executives Institute, Washington.
Meanwhile, the fate of legislation designed to put the Pension Benefit Guaranty Corp. on firmer financial footing hangs in the balance because of the sweeping trade legislation to which it was attached, ratifying the General Agreement on Tariffs and Trade.
"GATT is by no means a done deal. If the PBGC reforms sink along with GATT in December, they'll rise to the surface again in the next session," said Frank McArdle, manager of the Washington office of Hewitt Associates.
Senate Commerce Committee Chairman Ernest Hollings, D-S.C., blocked passage of the GATT legislation before the congressional session ended in early October, forcing lawmakers to return to vote on the trade bill after the November elections. The chances of GATT legislation passing this year are considered better than even.
If Congress doesn't pass GATT during the lame-duck session in early December, then all bets are off on a PBGC bill passing next year. That's because of the way Congress works: All pending bills die at the end of a session and have to be reintroduced in the next session. This lets lawmakers walk away from deals they cut previously, but it could make it harder for them to muster business support for the PBGC legislation.
Even if the PBGC bill sails through with the trade legislation this year, there almost certainly will be some technical amendments needed to smooth over bumps in the new law, said Lynn D. Dudley, director of retirement policy at the Association of Private Pension and Welfare Plans, a Washington-based trade group.
Other items on the legislative agenda for the next Congress are expected to include:
The Tax Simplification and Technical Corrections Act of 1993, which cleared the House of Representatives in May, but went nowhere in the Senate.
The so-called "super IRA" bill to encourage Americans to save by expanding individual retirement accounts to non-working spouses.
The Investment Advisers Act, which passed the full House unanimously this year but was blocked in the Senate by Phil Gramm, R-Texas. The bill will be on the plate next year, said Elise Hoffmann, an aide to Rep. Edward J. Markey, D-Mass., who sponsored the legislation.
A technical amendments bill to make it easier for employers to comply with the Uniformed Services Employment and Re-employment Rights Act, which President Clinton signed into law Oct. 13.
The tax simplification bill, introduced by then-House Ways and Means Chairman Daniel Rostenkowski, D-Ill., might need a new sponsor if he does not get reelected or if his legal troubles make it difficult for him to continue in Congress.
As framed this year, the bill would allow non-profit organizations to sponsor 401(k) plans for employees, and would simplify the definition of "highly compensated employees." Rep. Sam Gibbons, D-Fla., has been acting head of the Ways and Means Committee since Rep. Rostenkowski agreed to step down in May.
If Republicans win enough seats to take control of the House, Rep. Bill Archer, R-Texas, likely would become head of the powerful House committee. Mr. Archer also is expected to support the pension simplification measure.
The super IRA bill introduced by Sen. John Breaux, D-La., and Sen. Bill Roth, R-Del., this year is likely to return, even if Sen. Roth loses his seat in November.
Such bills have been criticized in the past as giving rich Americans yet another tax break by allowing them to sock away thousands of dollars in tax-deferred accounts. Nonetheless, "It could be potentially very popular for the 1996 presidential elections," Mr. McArdle suggests.
Another bill likely to be looked at next year is the Investment Advisers Act. As passed by the House this year, the bill would require investment advisers to disclose any conflicts of interests when they recommend products on which they also earn commissions. It also would set up a toll-free number so investors can get a disciplinary history of their investment advisers, and give the Securities and Exchange Commission more money to beef up oversight. Rep. Markey has not yet decided in what form to reintroduce the legislation, Ms. Hoffmann said.
Changes to The Uniformed Services Employment and Re-employment Rights Act also stand a good chance of passage.
The law, which was rushed through Congress at a time when U.S. armed forces were being sent to Kuwait and Haiti, will require employers with defined contribution plans to make retroactive contributions for reservists returning from duty in line with those made for other employees during that period.
But because such back contributions could exceed the Internal Revenue Service ceiling on annual contributions and accidentally trip up plans in non-discrimination tests, a bill is needed to allow employers to comply without running the risk of their plans losing their tax-favored status.
Measures legislators might take up next year that did not come up this year include:
Lowering caps on contributions to 401(k) accounts.
Expanding the Department of Labor's enforcement powers under the Employee Retirement Income Security Act by repealing limited scope audits. A provision in ERISA allows a plan's auditor to give the plan a clean bill of financial health without looking beyond the financial statements from the trustees.
Bolstering plan participants' rights to sue plan advisers for breaches of fiduciary duty by passing legislation that effectively would overturn the 1993 Supreme Court decision in Mertens vs. Hewitt Associates. The Labor Department gave up attempts to seek this legislation this year because of the administration's preoccupation with overhauling the nation's health care system.
Implementing a national retirement income policy, which is likely to receive more attention, now that interest in health care reform has waned.
A raft of bills aimed at putting the issue of Social Security on the table was introduced this year, including those by Reps. Rostenkowski and J.J. Pickle, D-Texas. None got much attention in Congress, but they are expected to come back next year, possibly with new backers because Mr. Pickle is retiring this year, and Mr. Rostenkowski's future in Congress is uncertain.
Already, a recent memo by Budget Director Alice M. Rivlin outlines a laundry list of options for President Clinton to bolster investments in key areas, while staying the course on deficit reduction. Among the choices: slowing down the rise in Social Security benefits; raising the retirement age at which younger Americans will be eligible for Social Security; and scaling back cost-of-living increases for federal government pensioners.
Any cutbacks in the federal programs will, of course, put more pressure on employers to make up for the lost benefits, pension experts say.
What's more, the Bipartisan Commission on Entitlement and Tax Reform's report on Social Security and other government-funded programs, due Dec. 15, is expected to spur debate in Congress next year. The national commission is headed by Sens. Robert J. Kerrey, D-Neb., and John C. Danforth, R-Mo.
