WASHINGTON -- The pension community anticipates only minor differences in dealing with Lawrence H. Summers, rather than Robert E. Rubin, as secretary of the Treasury.
Mr. Rubin resigned May 12 and will leave office at the beginning of July; Mr. Summers is expected to be confirmed as his successor.
"Bob Rubin would stand up in situations where (pension) issues were volatile at the moment and would step back and look at how the company, the participant and economy was affected and then make decisions. He tended to take a long view of pension issues. I expect Larry Summers will take the same stance," said Mark J. Ugoretz, president of the ERISA Industry Council, Washington.
He noted Mr. Summers often comes at pension issues from the capitalization point of view, pushing the importance of the private pension system as a source of capital in the markets.
"I'm not sure the extent to which Larry Summers would be familiar with the more technical aspects of pensions -- like non-discrimination rules. I would suspect that to the extent benefit issues arise, they will arise under Summers around investment issues, not technicalities," Mr. Ugoretz said.
Prior to Mr. Rubin's retirement announcement, Mr. Summers had made at least three speeches on pension and Social Security reform in the past two months, concentrating on:
* President Clinton's Universal Savings Account proposal;
* Moving budget surpluses into the Social Security and Medicare trust funds and investing 15% of those assets in equities through outside money managers;
* Strengthening the private pension system through tax credits for startup retirement plans, simplified defined benefit plans for small businesses, improvements in participant vesting schedules and pension portability measures; and
* Improving spousal benefits and disclosure.
Mr. Summers was not available for comment.
Mr. Rubin surrounded himself with a strong staff of pension experts in the benefit tax counsel's office, said Judith Mazo, senior vice president and director of research in the Washington office of The Segal Co. and a member of the ERISA Industry Council. She hopes Mr. Summers will continue the practice.
"What Robert Rubin has done for pensions primarily has been to appoint and support an excellent staff . . . who work with an excellent group at the IRS on pension issues. They have provided an extraordinary response to the private sector, have gotten out useful guidelines, in particular, innovative correction and self-correction programs," said Ms. Mazo.
Executives at the U.S. Chamber of Commerce, Washington, and Profit Sharing/401(k) Council of America, Chicago, said they anticipate little difference in their relationship with the Treasury under Mr. Summers.
"Rubin and Summers have been there together for a long time. Summers' appointment will probably minimize any major dislocations that can accompany a secretary leaving. Summers has been a fairly active deputy; he's a known commodity," said Martin A. Regalia, chief economist of the U.S. Chamber of Commerce.
Said Scott F. Grannis, chief economist at Western Asset Management Corp., Pasadena, Calif.: "Rubin didn't push for anything radical and Summers won't either. Summers' job will be to avoid making waves before the election and he's smart enough to do it."
