WASHINGTON — Efforts to fine-tune critical parts of the massive, new Pension Protection Act of 2006 could be stymied by political gridlock now that Democrats control Congress and both parties have begun positioning for the 2008 presidential race.
Retirement industry lobbyists had been hoping a legislative amendment would pass that would make key provisions in the new pension law more workable. Now, they fear Democrats will use their newfound power to include major regulatory changes in any such legislation, alienating Republicans and employers alike.
"If this bill begins to look like a Christmas tree, the real question for employers will be whether they really want it or not," said Mark Ugoretz, president of the ERISA Industry Committee, which represents major employers in Washington.
The electoral victory of the Democrats is expected to affect other fronts, as well:
cHearings likely will be held to re-examine allegations that fees charged to 401(k) plan participants are excessive.
cHearings also are expected on concerns that executive compensation is getting out of hand and shareholders lack sufficient say over the issue.
cThe political shift could spur the adoption of new legislation to regulate hedge funds.
cAn effort to amend the investment advice provision in the Pension Protection Act is expected to be blocked.
cEfforts by American Airlines and Continental Airlines to revise the PPA to better level the competitive playing field between them and Northwest Airlines and Delta Air Lines could be stymied.
cLegislation to create an "automatic" IRA program could get additional momentum.
And because Democrats will hold key leadership posts in the Senate and the House next year, including in committees that write legislation affecting the investment and retirement industries, the Democrats will have new power to set the federal political agenda.