WASHINGTON - Lawmakers, emboldened by their success in passing pension legislation in two consecutive years, are aiming for a hat trick in 1998.
Both Republican and Democrat legislators have begun drawing up plans for a string of bills they hope to introduce next year, concurrent with pushing for legislation that didn't make it into the huge tax bill enacted in August.
The heightened attention to pension issues on Capitol Hill is no accident. Legislators believe retirement income will be a hot-button issue for voters in a midterm election year.
What's more, with economists projecting the government could produce a budget surplus between $25 billion and $30 billion within the next few years, pension groups hope lawmakers will be more receptive to crafting legislation that can enhance coverage and encourage small businesses to set up retirement plans, even though they might command a hefty cost to the U.S. Treasury.
"We need to seize the moment and expand workplace opportunities for workers to save," said Rep. Earl Pomeroy, D-N.D., who introduced pension legislation in 1995 and this year.
"The new attention Congress is showing to pension savings issues" is a direct response to constituents reporting that saving for their retirement is one of their biggest challenges, he noted.
Mark J. Ugoretz, president of the Washington-based ERISA Industry Committee, agrees. "We've been urging our members to move away from the deficit thinking and come up with more creative (proposals)," he said.
Likely to receive attention are bills promoting equitable pensions for women, as well as legislation giving workers covered by pension plans more information on their account balances and how employers calculate their benefits, experts say. Restrictions on the way employers can invest the assets of their pension plans also might come up, following the passage of a proposal by Sen. Barbara Boxer, D-Calif., placing limits on how much 401(k) plans can hold of employer stock and employer-affiliated real estate.
Acting as investment manager
"We might see more of that type of legislation where Congress acts as the investment manager," suggested Samuel Murray, a Washington-based lobbyist for The Profit Sharing/401(k) Council of America.
Also likely to come up is a laundry list of warmed-over legislation from this session sought by the Association of Private Pension and Welfare Plans, the ERISA Industry Committee, the U.S. Chamber of Commerce and other employer groups.
Among them are bills letting workers make up retirement plan contributions they skipped while on leave for family-related or medical reasons.
At the top of the agenda for virtually every employer group is a repeal of the top-heavy rules that often make it virtually impossible for small and family-owned businesses to offer pension plans.
Also expected to show up again is legislation sponsored in the House by Reps. Christopher Shays, R-Conn., and Donald Payne, D-N.J., which would require large employer plans to have full-blown annual audits of their pension plans done by independent accountants. The proposal is backed by the Clinton administration, but unanimously opposed by employer groups.
"I would not say it is dead on arrival, but it is not going to move in its current form," said David Frank, a Republican staff aide to the House Education and the Workforce Committee. Messrs. Shays and Payne have tentatively scheduled hearings on the bill before Congress recesses early next month, but lack the authority to seek congressional action on it.
Budget bill the wild card
To be sure, the wild card for pension legislation next year is the uncertain outlook for a budget bill, traditionally the vehicle for pension legislation.
"As we get into the election cycle, you'll hear more discussion on pension issues as you did in 1996, but the actual pension legislative harvest next year probably won't be very big," predicted Frank McArdle, manager of the Washington office of Hewitt Associates, an employee benefits consultant.
Still, Hill staffers note a growing interest among lawmakers for a tax bill next year, possibly "a tax simplification bill," or one focusing on restructuring the Internal Revenue Service, the subject of recent congressional hearings, to which pension legislation could be attached.
'More ambitious bills'
Mr. Pomeroy, a member of a bipartisan congressional pension group, is adding more ambitious bills to his already pending pension legislation. He intends to identify all of the provisions in the nation's tax code that thwart working Americans from taking their retirement dollars from job to job, and is drafting an "omnibus rollover bill" that would make it easier for them to move money from the old employer-sponsored retirement plan to a new one.
At the same time, he hopes the bills he worked on this year will receive more attention in the coming session. Earlier this year, he co-sponsored the Secure Assets for Employers Plan Act, along with Rep. Nancy Johnson, R-Conn., that would make it easier for small employers to set up streamlined defined benefit pension plans.
He also introduced the IRA Savings Opportunity Act, which would encourage lower-income families to put money in individual retirement accounts by giving them a tax credit for 20% of the amount they set aside. The bill also would allow workers not covered by employer-sponsored retirement plans to tuck away $2,000 in a non-deductible IRA, in addition to contributing to a tax-favored IRA.
Finally, Mr. Pomeroy would like to see the Retirement Savings Commission Act of 1997 enacted. The bill would create a national task force charged with examining the private pension system and individual efforts to save, and with developing a game plan to ensure retirement income security, outside of the Social Security system.
Other possible legislation
Other topics expected to be on the table next year:
Portability. Sen. Orrin Hatch, R-Utah, a key Republican sponsor of bipartisan pension legislation in the Senate this year, intends to examine ways workers can take their retirement dollars from job to job, even if it means transferring the money between 401(k)-type retirement plans and traditional pension plans.
Sens. Jeff Bingaman, D-N.M., and Jim Jeffords, R-Vt., are working on updating their "ProSave" legislation, which would promote portability by creating a central clearinghouse, modeled along the lines of the Teachers Insurance and Annuity Association - College Retirement Equities Fund, to help workers save for their retirement.
Repeal of the "same desk" rule. This would make it easier for employees of businesses sold or merged to participate in the pension plan of the acquiring company, or roll 401(k) retirement money into an IRA, said Randolf H. Hardock, partner at the Washington law firm of Davis & Harman.
Some opponents of a repeal argue that employees will be tempted to spend the money when they get it. "I don't find that argument convincing," Mr. Hardock said, explaining that most people will prefer to let their savings grow in tax-favored accounts.
Employer comfort. Legislation that would reiterate employers may deduct money from their workers' paychecks for their IRAs without bearing any fiduciary liability for the way that money is invested. Opponents say such a bill states the obvious, but some lobbyists insist employers would like the comfort of seeing this stated in law.
"An additional statutory clarification doesn't cost anything, and if it (motivates) employees to get money into IRAs, let's do it," Mr. Pomeroy said.
Spousal consent. A "spousal consent" provision knocked out of the balanced budget law thanks to vociferous protests from employer groups is expected to resurface. The provision, sponsored by Sen. Carol Moseley-Braun, D-Ill., would require employees to get the written approval of their spouses before tapping into their employer-sponsored retirement dollars, even for emergencies.
Employer groups observed that the provision would hurt more women than it would protect because it would prevent working women from getting speedy access to their own money when they need it most, especially if their spouses have abandoned them.
Retiree health care. Expect legislation that will focus on ensuring employers keep their promise to employees on retiree health care, suggested Mr. McArdle.