CHICAGO - Pension policy moved to center stage of American politics at the Democratic National Convention last week, with the Rev. Jesse Jackson calling for using pension assets to rebuild America's infrastructure and several other speakers promising to enhance retirement income security.
"This is an amazing, new experience," said Janice Gregory, vice president of the ERISA Industry Committee, Washington. "We're hopeful, but we don't know how hopeful to be."
While retirement security is emerging as a politically potent issue, there are underlying themes of protectionism and increased regulation in the Democrats' message.
Mr. Jackson, for example, resurrected a proposal that pension assets be used toward rebuilding America's infrastructure and creating jobs.
In his Aug. 27 speech, Mr. Jackson said 5% - or about $300 billion - of private and public pension funds assets should be used to "reinvest in our infrastructure and put America back to work.
"We have $6 trillion in private and public pension funds .... If we can rebuild Poland and Europe and Japan, we can build Chicago and Atlanta and Memphis and Nashville," Mr. Jackson said in one of the more passionate speeches at the convention. "We can rebuild America."
Meanwhile, the Democratic platform heralds the recent accomplishments of the Clinton administration in the pension area and calls for four more years of expanding portability, protecting retirement security and increasing pension coverage.
"Over the next four years, we want to take further steps to make sure that Americans who have worked hard for their whole lives can enjoy retirement in the dignity and security they have earned," the platform says.
And throughout the four-day convention, speakers peppered their speeches with comments on protecting and promoting retirement security. Even AFL-CIO President John J. Sweeney said in his Aug. 28 speech that workers are worried about retirement security because of employers downsizing and cutting benefits.
"They want a doctor when they need one, a little rest when they are weary, and a pension after a lifetime of work," Mr. Sweeney said.
As for the Republicans, it's hard to find specific references to retirement security in the party platform and in speeches made at the Republican National Convention earlier last month.
But in his tax proposal, GOP presidential candidate Robert J. Dole proposed a new individual retirement account called American Dream Savings Accounts. The account would allow individuals to make up to $2,000 a year in non-deductible contributions. At age 591/2, and after holding the money in the accounts for five years, individuals could withdraw the money tax-free. Also, prior to the five-year holding period and age requirement, individuals could withdraw the money - without getting hit with a 10% early withdrawal tax -for special purposes including first-time home buying, higher education and medical expenses. Spouses also would be eligible to make annual contributions of $2,000.
Henry Saveth, principal with A. Foster Higgins & Co. Inc. in New York, said Republicans might have been more reserved at their convention because they may be "more interested in trying not to upset employers with reforms which may look attractive on paper, but may have unintended consequences ...."
In a speech at last week's Democratic convention, Senate Minority Leader Tom Daschle said Democrats want to make it easier for millions of American workers to get a pension and to "protect the pensions of people who have earned them."
As part of the Democrat's Families First agenda, House Minority Leader Richard Gephardt said in his speech that "corporations should be loyal to their employees and to their communities and share profits with the workers who create them."
And to plan sponsors who might not invest assets in participants' best interest, Mr. Gephardt added workers "deserve to see the pensions they earned protected. It's their money, not the company's."
While the constant and specific mention of retirement security is exciting, it is of some concern to industry observers that the issue isn't used to scare participants, said James Klein, president of the Association for Private Pension and Welfare Plans, Washington.
Promoting the issue "is great and it ought to be encouraged," said Mr. Klein, who attended last week's convention in Chicago. But he cautioned some of the promises made "could be done in a lot of high-profile ways that are bad policy."
Mr. Klein cited a recently released Department of Labor regulation that shortens the time plan sponsors have to make employees' contributions to their 401(k) plans. He said he fears there may be "a steady drum beat of high-profile issues that will regularly paint plan sponsors as being uninterested in protecting pensions."
Meanwhile, many experts discounted Mr. Jackson's idea as mere hype and a way to rally the crowd.
"He is an anachronistic dinosaur and will never change," said Tim Straus, vice president at Jefferies & Co., Los Angeles. "The likelihood of this kind of mandate .*.*. is zero to none."
But despite its unlikely adoption by the Democrats, Mr. Jackson's idea has cropped up before, and has stirred some interest. Even with a remote possibility of gaining ground, "employers have no choice but to keep their guard up," said Mr. Saveth from Foster Higgins.
And while there might not be much movement toward social investing interests, several observers said they do expect to see the Democrats follow through on some of the retirement savings pitches delivered at the convention.
One resounding belief, many agreed, was that some of the new ideas would require more rules and regulations.
Howard Golden, principal at Kwasha Lipton, Fort Lee, N.J., said the pension security promises might translate into increased obligations on the part of plan sponsors. Mr. Golden predicted the Clinton administration, if re-elected, would continue its push to force plan auditors to issue complete opinions on the security of plan assets.