Pension lobbyists want just a few small things from Congress this year.
At the top of their list is the so-called "Pension Simplification Act," a grab-bag of provisions that passed Congress twice but died on President Bush's desk in 1992.
Among other things, the proposal would make it easier for small businesses to offer retirement benefits to their employees, relax the amount of retirement benefits higher-paid employees can earn, and let non-profit organizations and state and local government units set up 401(k) plans.
"At a bare minimum, we would hope that the pension simplification measures that have already passed Congress twice should get taken up and passed," said James A. Klein, executive director of the Association of Private Pension and Welfare Plans.
The American Council of Life Insurance, the American Society of Pension Actuaries and the ERISA Industry Committee also intend to lobby lawmakers to pass the legislation this year.
One of the most popular provisions of the proposal would exempt employers that meet certain conditions from conducting onerous and time-consuming tests to prove their 401(k) plans do not discriminate in favor of highly-paid employees.
Another provision would revoke what pension lobbyists disparagingly refer to as "the family aggravation rule." The rule, part of tax law changes in the mid-1980s, forced employers to cut back to $150,000 the amount of salary on which they could base retirement benefits for members of a family working at the same corporation.
A third provision would cut the paperwork and administrative costs for employer-sponsored plans for higher-paid employees. As proposed earlier, the provision would revoke a rule requiring employers with "top-heavy" plans to pay rank-and-file employees a corresponding minimum level of benefits and speed up their vesting in the plan. The rule defines top heavy plans as those in which more than 60% of the accrued benefits go to highly paid employees. Pension lobbyists contend that complying with these top heavy rules, which apply to both defined benefit and defined contribution plans, places a heavy burden on small employers.
"You must go back and figure out who was a highly compensated employee for a number of years," noted Chester J. (Chet) Salkind, executive director at the American Society of Pension Actuaries, Arlington, Va.
The pension actuaries' association also would like Congress to restore to $235,000 the amount of salary on which employers can base pension benefits. President Clinton's 1993 budget law lowered that salary cap to $150,000.
Several key lawmakers - including Bill Archer, the Texan who heads the House Ways and Means Committee, and Arkansas Democrat David Pryor, a member of the Senate Finance Committee - support this legislation. Sen. Jim M. Jeffords, R-Vt., a member of the Senate Labor & Human Resources Committee, had supported the previous pension simplification bill but would like to see the new legislation before deciding whether he supports it, said Elaina Goldstein, counsel.
"That is definitely something on the radar screen ... especially if it's non-controversial and revenue neutral," Frank Hampton, a legislative aide to Rep. Archer, told a group of employee benefits professionals in Washington recently.
Meanwhile, Mr. Pryor, a previous sponsor of the bill, is planning to introduce the bill again this month, possibly with some changes, said Steven Glaze, tax counsel to the senator.
Apart from giving incentives to small employers to offer retirement benefits to their workers, his bill also would let businesses that employ up to 100 people add a salary reduction feature to their simplified employee pension plans. Under current law, this feature is limited to businesses that employ less than 25 workers.
"He is very very interested in targeting employees of small businesses where the savings rates are very very low," Mr. Glaze said.
Some lobbying groups also would like to see Congress roll back the limits on how much employers can contribute to their pension funds each year. Changes in the tax laws in 1987 capped employer contributions to pension funds at 150% of current liabilities.
Melissa J. Kahn, senior counsel at the ACLI, admits the idea isn't likely to go over terribly well in Congress, which is desperately searching for ways to arrest the nation's runaway budget deficit. Nonetheless, "In the long term it is very necessary," she says. "If you were able to get people in Congress to look at the impending (retirement income) crisis over the next 30 years, these things become more realistic," she observed.
Meanwhile, the Financial Executives Institute's Committee on Investment of Employee Benefit Assets intends to lobby to make sure Congress does not enact laws curbing the ability of corporations to invest pension assets in derivative securities, said Gina Mitchell, a lobbyist in the Washington office.
"Derivatives have been one of the tools that people have used to minimize (investment) risk," she noted.
And a loose coalition of various groups, headed by the U.S. Chamber of Commerce, would like to change the way the federal government calculates how much revenue it loses each year through the tax deduction on employer contribution to pension plans.
The current calculation includes contributions by state and local governments to their pension plans, and does not take into account taxes participants eventually pay on their retirement benefits.
"One of our arguments is that the true cost to the government is only the interest expense ... It's like an interest-free loan to participants because they don't pay taxes upfront," said Samuel Murray, vice president for government affairs in the Washington office of the Profit-Sharing Council of America.
Of course, representatives of corporate pension plans also want assurances that the Republican-controlled Congress won't attempt to erode the sacred tax-favored status of private pension plans in order to pay for tax cuts elsewhere.
Mr. Klein's group is taking no chances. The association plans to mount an all-out offensive to ensure lawmakers understand how the private pension system helps boost the nation's skimpy savings rate.
But while senior Capitol Hill staffers have promised Republican lawmakers will preserve the tax status of private pension plans, they cannot promise the new majority will grant any other wishes until it first passes items on the Contract with America, and a more modest health care reform package than the one President Clinton sought last year.
Sen. Phil Gramm, R-Texas, introduced a health care bill last month, and Rep. Harris Fawell, R-Ill., chairman of the House Employer-Employee Relations subcommittee, is expected to schedule hearings on the subject later this month.
But, while the new majority has already won passage in the House of the first item on its legislative agenda, a balanced budget amendment, it is assured little cooperation from Democrats in passing most of the others. The balanced budget amendment cleared the House late last month, but now faces stiff opposition from Democrats in the Senate. President Clinton and some Democrats do, however, support the Republicans' proposal to expand tax-sheltered retirement accounts. House Republican leaders had promised to pass all 10 items on their agenda within the new Congress' first 100 days.
"Until we get health care costs under control, people won't focus on pensions," said Ms. Goldstein.
That means pension lobbyists might have to wait until late summer, or even the fall before Congress can take up items on their wish lists.
Mark J. Ugoretz, president of The ERISA Industry Committee, a group representing more than 120 large corporations, accepts that pension issues may not get much attention this year. "Health care issues seem to be the dominant point of focus still. It appears that most of the decisions on pensions may be put off until next year," he noted.