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CCH® PENSION AND BENEFITS — 7/25/06

Lawmakers say they are nearing an accord on pension reform legislation

As we go to press, House and Senate lawmakers from both parties said they were close to reaching an agreement to overhaul that nation's pension laws, but declined to set a definite date when negotiations would be complete.

Senate Finance Committee Chairman Charles E. Grassley (R-IA) and the panel's Ranking Member Max Baucus (D-MT) said that negotiations were nearly complete with Grassley calling the pension bill "must-do" legislation. Baucus told CCH that he believed pension conferees would complete the conference report before Congress leaves Washington for its August recess.

Neither lawmaker gave any specific details on the agreement, but Grassley said legislative aides have already begun drafting the bill text. The pension bill would affect millions of Americans in employer-sponsored retirement plans, as well as provide funding relief for the troubled airline and automotive industries.

House Majority Leader John Boehner (R-OH) said he is confident that the eventual conference report would include provisions dealing with credit balances, an accounting method that makes pension plans look financially healthy. He said eliminating the use of credit balances would put the pension system on solid footing.

Boehner also predicted that claims against the PBGC would decline under the pension legislation now being negotiated. He indicated the legislation would boost funding of pension plans over the next 25 years.

Enzi submits draft proposal

Pension reform conferees and their staffers spent the weekend of July 15-16, 2006 working through a draft proposal developed by Sen. Michael Enzi (R-WY), Chairman of the Senate Health, Education, Labor and Pensions Committee, who also chairs the pension reform conference committee. The Chairman's draft is intended to help complete the conference agreement on the pension bill, Enzi said in a July 17, 2006 statement. Enzi added that he believes that "the House has narrowed down its concerns in a House counter offer that would propose modifications to the Chairman's draft."

"The bottom line is that we all agree on 90 percent and I'm expecting to finish up the last 10 percent in the next couple of days so that we can have the bill to the President this month," said Enzi.

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

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