Rep. Bernie Sanders, I-Vt., today, as expected, announced plans to introduce legislation penalizing companies that convert to cash balance plans without giving workers the choice of staying in their traditional pension plans. Otherwise, the conversion would be treated as a termination of the old plan and a reversion of assets would occur. The legislation, co-sponsored by Rep. Maurice Hinchey, D-N.Y., also would automatically impose a 50% excise tax on any pension surpluses considered to be reverted.
The bill also would require companies to give employees 45 days’ notice of any proposed pension plan changes that could cut their benefits, in a form allowing them to compare their benefits under the old and new plans.
Moreover, the proposal directs the Treasury Secretary to enforce all existing age discrimination provisions relating to pension plans; and it prevents companies from stopping accruals for older workers when companies make changes in their pension plans. This provision mirrors a proposal introduced earlier this year by Sen. Tom Harkin, D-Iowa.
