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CCH® PENSION AND BENEFITS — 4/17/06

Lawmakers fail to reach accord on pension reform bill prior to recess

House and Senate lawmakers left for Easter recess without reaching agreement on a pension reform conference bill (H.R. 2830). House Majority Leader John A. Boehner (R-OH), told reporters that the measure will have to wait until after the Easter break, which lasts from April 7 through April 24, 2006. Conferees had hoped to reach agreement by April 15, the deadline for corporate quarterly pension payments. Boehner reaffirmed the need for pension legislation, but declined to address the impact that a lack of a conference agreement would have on corporations.

House votes to instruct conferees to accept Senate's provisions on cash balance plans

Separately, the House on April 6, 2006, voted 248 to 178 to instruct the pension conferees to accept the Senate version of H.R. 2830 with respect to cash balance conversions. The Senate's provisions would prohibit wearaway in connection with conversions to cash balance plans and would establish certain protections to employees affected by such conversions. The motion to instruct was offered by Rep. George Miller (D-CA), ranking member of the House Education and the Workforce Committee.

In a press statement, Rep. Miller said that the Senate bill protects workers in two ways. First, he said, it protects all of the benefits already earned by workers in the traditional pension plan. In other words, workers may not lose any benefits they have already accrued through the old plan as a result of a conversion. Second, he said, the Senate language requires companies to provide some type of protection for pension benefits that accrue after the conversion to a cash balance plan. "The House-passed bill contains no protection for older workers," said Miller, "and would actually legalize some of the worst employer practices that jeopardizes worker retirement security and their retirement nest eggs."

For more information on this and related topics, consult the CCH Pension Plan Guide.

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