WASHINGTON - The legislative package dubbed "pension simplification" could pass Congress before lawmakers recess in two weeks.
The package has broad bipartisan support and has cleared Congress three times in the past, but each time it died on the president's desk because it was part of broader tax legislation that was vetoed for unrelated reasons.
This time, however, the pension measures are part of a broader tax bill that would raise the minimum wage for the first time in five years, and President Clinton has said he will sign the bill.
Although Republicans had steadfastly opposed the minimum wage hike, their resolve weakened under pressure from Democrats. The bill passed the Senate with overwhelming support earlier this month. A similar version of the bill had passed the House in May.
Now, Republican lawmakers are eager to present the bill to Mr. Clinton before their convention begins in San Diego Aug. 15, so they can claim at least part of the credit for a measure that allays middle-class Americans' economic anxiety, according to Washington observers.
They also do not want to give the president an opportunity to use the Democratic convention to pound the Republicans for obstructing a bill raising the living standards of more than 10 million working Americans, observed Ann L. Combs, a principal at the Washington office of William M. Mercer Inc. and a former senior official in the Labor Department's pension office.
There is one possible roadblock. Senate Majority Whip Don Nickles, R-Okla., has threatened to delay appointing members to a conference committee that would work out differences between the House and Senate versions of the bill, in retaliation for a similar move by Sen. Edward Kennedy, D-Mass., on pending health care legislation.
Washington observers, however, are confident other Republicans will persuade Mr. Nickles that holding the minimum wage bill hostage might cost their party dearly in the November elections.
"This is the best shot yet that pension simplification has had of becoming law," observed Frank McArdle, manager of the Washington officer of Hewitt Associates, the employee benefits consulting firm. Republican legislators, he noted, "are going to want to fortify their individual re-election prospects because their presidential candidate might not have any coattails."
Republican lawmakers also don't want to be turned out of Congress in November by voters angry over the lawmakers' inability to pass legislation that could help people build a bigger nest egg for their old age, said Mark Ugoretz, president of the ERISA Industry Committee, a Washington-based trade association representing large employers.
The legislation "will have an immediate impact on peoples' lives" by making it easier for employers to administer retirement plans, encouraging small businesses to set up new plans and letting homemakers set up fully tax-deductible individual retirement accounts, Mr. Ugoretz noted.
While the key provisions of the House and Senate versions of the pension bill are essentially the same, there are some new provisions tucked away in the Senate bill that employer groups and some lawmakers oppose.
Most notably, two Republican congressmen came out against a provision that would ease the effects on the insurance industry of the Supreme Court's 1993 decision in John Hancock Mutual Life Insurance Co. vs. Harris Trust and Savings Bank.
The high court ruled in the case that a portion of pension plan assets held in insurance companies' central investment pools are subject to federal pension law, and by corollary, to the same fiduciary standards.
In a recent letter to House Speaker Newt Gingrich, R-Ga., Reps. Harris W. Fawell, R-Ill., and William F. Goodling, R-Pa., said the Senate provision would "immunize the insurance industry for two decades of misconduct in handling these retirement investments - even willful violations."
By their estimates, pension funds have close to $500 billion in assets held by insurance companies in the insurers' general accounts.
Mr. Fawell is an influential member of the House on retirement issues and chairman of a House subcommittee that oversees retirement matters. Mr. Goodling is chairman of the House Economic and Educational Opportunities Committee.
Many large pension plan sponsors, including BellSouth Corp., Coca-Cola Co., the Ford Motor Co., Motorola Inc., Procter & Gamble Co., also oppose the provision.
While the Senate provision would not affect any lawsuits filed against John Hancock, it would ensure other insurance companies do not face similar lawsuits by excluding such assets from regulation by federal pension law.
Messrs. Fawell and Goodling, who are pushing to be part of the conference committee on the tax bill, are seeking to water down the provision so that participants could claim damages for lost benefits as a result of the way their plan money was invested by insurance companies in their central investment pools.
They also want individuals, and not just the Secretary of Labor, to be able to bring a criminal lawsuit against insurance companies for egregious conduct.
What's more, some employers are worried about a provision in the Senate bill that would double to 10% the penalty taxes they would pay for conducting transactions barred under ERISA.
"That is going to bite some people," warned Will Sollee Jr., counsel to the Washington law firm of Kirkpatrick & Cody.
But, the ERISA Industry Committee, for one, is not going to quibble over it, Mr. Ugoretz said. And finally, large companies would prefer not to deal with a provision sponsored by Sen. Carol Moseley-Braun, D-Ill., that would protect spouses from inadvertently signing away their rights to a pension after their partner's death.
The provision also would give participants a choice in ensuring their survivors receive two-thirds of their pension benefits, instead of only half, as required under current law.
"It's more paperwork for companies and they are going to have to revise all their election forms," Mr. Sollee explained.