[Congressional Record Volume 142, Number 39 (Wednesday, March 20, 1996)]
[Extensions of Remarks]
[Page E389]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    ERISA CLARIFICATION ACT OF 1996

                                 ______


                           HON. MARGE ROUKEMA

                             of new jersey

                    in the house of representatives

                        Tuesday, March 19, 1996

  Mrs. ROUKEMA. Mr. Speaker, today I am introducing the ERISA 
Clarification Act of 1996.
  For almost 20 years, the insurance industry has relied on a 
Department of Labor interpretive bulletin stating that assets contained 
in an insurance company general account were not plan assets under 
ERISA.
  However, in 1993 the Supreme Court ruled in John Hancock versus 
Harris Trust that such pension assets were covered by ERISA. Because 
the court recognized that this interpretation could seriously disrupt 
pension management, it recommended that potential problems be addressed 
either administratively or legislatively.
  Although the Department of Labor is currently working to develop new 
rules governing prospective insurance company activities, without 
legislative changes, insurance companies might go unprotected from 
retroactive liability further threatening the security of pension 
assets.
  Because of the manner in which insurance companies have managed their 
pension assets over the past 20 years, this legislation will remove the 
threat of retroactive liability. In doing so, pension plan participants 
and beneficiaries will be protected without affecting any ongoing civil 
action.
  Since the Department of Labor issued its interpretive bulletin in 
1975, there is little evidence that plan participants have suffered as 
a result of this longstanding practice of the insurance industry. In 
fact, prior to the Harris Trust decision, the Department of Labor had 
not initiated any enforcement proceedings based on alleged 
mismanagement.
  If we do not address this issue, we will seriously risk the safety 
and security of pension assets while unfairly exposing the insurance 
industry to retroactive liability costs based on actions which, at the 
time, were in accordance with the Department of Labor's rules and 
regulations.
  Therefore, I would ask my colleagues to join me in this effort by 
becoming cosponsors of this necessary legislation.

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