President Bush announced a legislative proposal today allowing the PBGC to raise premiums it charges underfunded pension plans. The proposal, included in the presidents fiscal 2009 federal budget, is aimed at helping the agency close a $13.1 billion deficit in its single-employer program, according to the budget. The proposal was originally advanced by Mr. Bush in 2005 as part of his comprehensive pension reform plan but was not included in the Pension Protection Act of 2006; it was also included in the fiscal 2008 budget but failed amid opposition from pension plan industry lobbyists.
The 2009 budget also includes a series of proposals previously presented by Mr. Bush that would simplify the rules applied to a variety of defined contribution and other savings plans. Among other things, the proposals would consolidate 401(k), SIMPLE 401(k), SARSEPS (salary reduction simplified employee pensions), thrift plans, 403(b) and governmental 457(b) plans into a new Employer Retirement Savings Account. The account would be subject to the same rules that generally apply to 401(k) plans. The retirement plan proposals, included in previous presidential budgets, have also failed to go anywhere because key lawmakers were concerned it could undermine the current employer plan system.
I really havent seen anything new in here (the presidents 2009 budget), and we dont think these proposals will see any significant action this year, said Ted Godbout, a spokesman for the ERISA Industry Committee, Washington.
The presidents budget also proposed a 6% hike in funding for the Department of Labors Employee Benefits Security Administration, up to $147.9 million. The increase is intended to let EBSA increase the quality, timeliness and transparency of pension information disclosed to the public and employees, as well as to maintain the strong enforcement record of recent years, according to a DOL press release.