COMMITTEE TO HOLD HEARING ON PENSION REFORM LEGISLATION
WASHINGTON -- Senate Finance Committee chairman William V. Roth, Jr. (R-DE) today announced the Committee will meet on Wednesday, June 30, 1999 at 10:00 a.m. in 215 Dirksen Senate Office Building, to hear testimony on pension reform legislation.
The following witnesses are expected to appear before the Committee:
I. A panel consisting of:
Patrick J. Purcell, Specialist in Social Legislation, Domestic Social Policy Division, Congressional Research Service; Washington, D.C.
Rita D. Metras, Director, Total Compensation, Eastman Kodak Company, Rochester, N.Y.
Robert Hill, Esq., Trial Attorney, Denver, C.O.
II. A panel consisting of:
Scott Macey, ASA, Inc., Sommerset, N.J.
Richard Pearce, President of Alliance Benefit Group of Delaware, Inc., Wilmington, D.E.
Anne Combs, Esq., Vice President and Chief Pension Counsel, American Council of Life Insurers (ACLI), Washington, DC.
Lou Valentino, Watson Wyatt Worldwide, New York, NY, on behalf of the National Defined Contribution Council
The purpose of this hearing is to examine the various legislative proposals regarding pension plans and retirement savings. Panel one will discuss cash balance plan disclosure--why cash balance plans are established and what is appropriate disclosure. Panel two will present pension community views on pension reform legislation, including the Retirement Savings Opportunity Act (S.646), introduced by Senators Roth and Baucus, the Pension Coverage and Portability Act (S. 741), introduced by Senators Graham and Grassley, and the Pension Right to Know Act (S.659) introduced by Senators Moynihan, Kerrey and Robb.
The Roth/Baucus bill increases the limits on contributions that individuals can make to IRAs, Roth IRAs, 401(k) plans, 403(b) plans, SIMPLE plans and 457 plans. The bill also establishes a new type of plan for 401(k) and 403(b) plans modeled after the Roth IRA, where distributions after retirement are not taxable. It permits individuals to make extra "catch-up" contributions to IRAs, Roth IRAs, 401(k) plans, 403(b) plans and 457 plans after they attain age 50. In addition, the bill provides additional incentives for small businesses to create and maintain plans.
The Graham/Grassley bill addresses issues such as expanding pension coverage for small businesses, enhancing fairness for women in retirement savings, strengthening pension security and enforcement, reducing red tape in plan administration, increasing pension portability and encouraging retirement education. Similar legislation has been introduced in the House of Representatives by Representatives Portman and Cardin.
Senator Moynihan's bill, the Pension Right to Know Act, would require employers who make a plan change that decreases future benefit accruals to provide increased disclosure of the impact of these benefit changes to individuals. This would apply in many situations where a company converts its defined benefit plan into a cash balance plan. Failure to follow these disclosure rules would result in the plan losing its tax qualified status. These provisions, however, would only apply to employers of more than 5,000 or for plans with more than 1,000 participant
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