WASHINGTON - Senate Democrats, wanting to repeat their success in gaining Republicans' acceptance of a tough legislative package overhauling accounting regulation, will press for enactment of a pension bill before lawmakers adjourn later this year.
In fact, one Capitol Hill source said some Democrats predict there will be another Enron Corp. or WorldCom Inc. debacle that will have implications for the company's 401(k) plan participants; that, the source said, would bolster the Democrats' pension agenda.
In recent weeks, Senate Majority Leader Tom Daschle, D-S.D., has attempted to capitalize on Republicans' ties to corporate America by painting the White House's pension proposals, and the subsequent watered-down pension bill passed by the Republican-controlled House in April, as "toothless." At a press conference on Aug. 1, Mr. Daschle and Sen. Edward M. Kennedy, D-Mass., sought to differentiate the Senate Democratic bills from the Republican pension legislation.
"Pensions are rising on the political agenda," observed Randolf H. Hardock, a pension lobbyist and a partner in the Washington law firm of Davis & Harman. The Democrats, he said, "will try to repeat their experience with the accounting bill" in getting Senate Republicans to support a pension bill tougher than the proposal by President Bush and the bill passed by the House.
Brian H. Graff, executive director of the American Society of Pension Actuaries, Arlington, Va., concurs.
The chances of pension legislation "becoming law are better than they were two weeks ago. All this public rhetoric makes it hard to back away," he said.
Two weeks ago, James M. Delaplane Jr., vice president of retirement policy at the Washington-based American Benefits Council, believed the chances of enactment of a pension package were less than 50-50. Now, he says, "we have exceeded a 50% likelihood of seeing a pension bill enacted into law this year. It's clear just how the firm the commitment of Sen. Daschle is to find floor time. Its going to be in the interests of the house Republicans and the White House to have a bill and the real question is, `What will the contents will be,' " he said.
But some other experts maintain that even if Democrats get their version of pension legislation through the Senate, lawmakers might run out of time to negotiate the final version with the House and send a bill to the president before Congress adjourns this year.
Competing for lawmakers' attention when they return from their summer recess in September are bills on the creation of a homeland security department, bankruptcy reform and 13 appropriations bills needed to keep the federal government running after the end of the fiscal year Sept. 30.
Some observers suggest Mr. Daschle simply may set aside the pension bill until after the midterm elections. "It's going to be hard to conference a bill by the November elections," acknowledged Shaun O'Brien, senior policy analyst at the AFL-CIO in Washington.
To be sure, Senate Democrats first must agree on a single Senate pension package between the two competing pension bills passed by the Finance Committee in July and the Health, Education, Labor and Pensions Committee months earlier. The Senate Finance Committee is headed by Sen. Max Baucus, D-Mont., a more moderate lawmaker than the staunchly liberal Mr. Kennedy, chairman of the HELP Committee. So Mr. Daschle is expected to play a key role in shaping a Senate Democratic pension package that can be presented for a vote by the full Senate, sources say.
Some sources suggest Mr. Daschle will ensure the Senate package will be palatable to Senate Republicans while allowing the Democrats to differentiate themselves from the House Republican package. "Their idea is to come up with something that gets 60" or more votes, Mr. Graff said.
One sticking point: provisions in the HELP Committee bill that would limit the ability of employers to offer company stock as an investment option in defined contribution plans if they match employee contributions in company stock, except in circumstances where the employers also provide reasonably generous traditional pension coverage to most employees. Another is a provision in the HELP Committee's proposal that would place employee representatives on the board administering the retirement plan. Finally, the HELP Committee's bill would make it easier for plan participants, not just the retirement plan, to sue fiduciaries and corporate executives for breach of federal pension law and seek restitution of losses.
A Democratic Senate source observed that all three provisions are "still in play." A likely compromise would be the inclusion of limits on employers offering company stock, so long as the definition of an acceptable pension plan is broadened to include cash balance and other hybrid plans, according to a source close to the negotiations, who declined to be identified.
While the joint trusteeship provision is likely to fall out of the combined bill, some type of expanded remedies for participants might be acceptable in the combination of the two bills, the source said.
Nevertheless, the two proposals have much in common. Both bills:
* would grant employers immunity from the provisions of federal pension law if they use an independent "qualified investment adviser" other than the retirement plan provider to offer financial advice to participants about their retirement investments.
* would let participants diversify out of employer stock after three years of service, although the Finance Committee bill would phase in that requirement, while the HELP Committee's version would allow it all at once.
* would require employers to notify workers at least 30 days in advance of any blackout period during which they would not be able to move their retirement money between investment options, although the definitions of "blackout" differ. A similar provision also was included in the accounting law changes recently enacted, but that is overseen by securities regulators.
* would require corporate executives to report to their workers about "insider" sales of company stock.
* would clarify that employers do not have protection from federal pension law during blackout periods, except under certain circumstances.