[Congressional Record Volume 142, Number 117 (Friday, August 2, 1996)]
[Senate]
[Pages S9607-S9609]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    NONDISCRIMINATION RULES FOR GOVERNMENT PENSION PLANS LEGISLATION

  Mr. HATCH. Mr. President, I rise today to introduce legislation with 
Senators Conrad, Pressler, Pryor, Nickles, and Baucus that would make 
permanent the current moratorium on the application of the pension 
nondiscrimination rules to State and local government pension plans.
  For nearly 20 years, State and local government pension plans have 
been deemed to satisfy the complex nondiscrimination rules of the 
Internal Revenue Code for qualified retirement plans until Treasury can 
figure out how or if these rules are applicable to unique Government 
pension plans. This bill simply puts an end to this stalled process and 
dispels over 20 years of uncertainty for administrators of State and 
local retirement plans. Let me summarize the evolution of this issue 
and why this bill is being introduced today.
  Mr. President, the Federal Government has a long-established policy 
of encouraging tax deferred retirement savings. Most retirement plans 
that benefit employees are employer sponsored tax deferred retirement 
plans. Over the years, Congress has required that these plans meet 
strict nondiscrimination standards designed to ensure that they do not 
provide disproportionate benefits to business owners, officers, or 
highly compensated individuals.
  In response to the growing popularity of employer sponsored tax 
deferred pension plans, Congress passed the Employee Retirement Income 
Security Act [ERISA] in 1974 to enhance the rules governing pension 
plans. However, during consideration of ERISA Congress recognized that 
nondiscrimination rules for private pension plans were not readily 
applicable to public pension plans because of the unique nature of 
governmental employers. Former Representative Ullman, during Ways and 
Means Committee consideration of ERISA, stated, ``The committee 
exempted Government plans from the new higher requirements because 
adequate information is not now available to permit a full 
understanding of the impact these new requirements would have on 
Governmental plans.'' Thus, Congress was not prepared to apply 
nondiscrimination rules to public plans. After studying the issue, the 
Internal Revenue Service on August 10, 1977, issued News Release IR-
1869, which stated that issues concerning discrimination under State 
and local government retirement plans would not be raised until further 
notice. Thus, an indefinite moratorium was placed on the application of 
the new rules to government plans.
  In 1986, Congress passed the Tax Reform Act of 1986, which made 
further changes to pension laws and the general nondiscrimination 
rules. On May 18, 1989, the Department of the Treasury, in proposed 
regulations, lifted the 12-year public sector moratorium and required 
that public sector plans comply with the new rules immediately. 
However, further examination revealed, and Treasury and the IRS 
recognized, that a separate set of rules was required for State and 
local government plans because of their unique features. Consequently, 
through final rules issued in September 1991, the Treasury 
reestablished the moratorium on a temporary basis until January 1, 
1993, and solicited comments for consideration. In addition, government 
pension plans were deemed to satisfy the statutory nondiscrimination 
requirements for years prior to 1993. Since then, the moratorium has 
been extended three more times, the latest of which began this year and 
is in effect until 1999.

  Mr. President, here we are, in August 1996, 22 years since the 
passage of ERISA and State and local government pension plans are still 
living under the shadow of having to comply with the cumbersome, 
costly, and complex nondiscrimination rules. Experience over the past 
20 years has shown that the existing nondiscrimination rules have 
limited utility in the public sector. Furthermore, the long delay in 
action illustrates the seriousness of the problem and the doubtful 
issuance of nondiscrimination regulations by the Department of the 
Treasury.
  Mr. President, last year during consideration of another extension of 
the moratorium, a coalition of associations representative of State and 
local governmental plans summarized their current position in a letter 
to IRS Commissioner Margaret Richardson dated October 13, 1995.

       In our discussions with Treasury over the past two years, 
     there have been no abuses or even significant concerns 
     identified that would warrant the imposition of such a 
     cumbersome thicket of federal rules on public plans that 
     already are the subject of State and local government 
     regulation.
       Accordingly, while we always remain open to further 
     discussion, as our Ways and Means statement indicates the 
     experience of the past two years in working with Treasury to 
     develop a sensible and workable set of nondiscrimination 
     rules for governmental plans has convinced us that the task 
     ultimately is a futile one--portending tremendous cost, 
     complexity, and disruption of sovereign State operations in 
     the absence of any identifiable problem.

  Mr. President, the sensible conclusion of this 20 year exercise is to 
admit that the Treasury is not likely to issue regulations for State 
and local pension plans and Congress should make the temporary 
moratorium permanent.
  Furthermore, there are examples to support this legislation. Relief 
from the pension nondiscrimination rules is not a new concept. 
Multiemployer plans are currently not covered by the nondiscrimination 
rules under the theory that labor-management collective bargaining will 
ensure nondiscriminatory treatment to rank-and-file workers. In 
reality, Mr. President, State and local government pension plans face 
an even higher level of scrutiny. State law generally requires publicly 
elected legislators to amend the provisions of a public plan. Electoral 
accountability to the voters and media scrutiny serve as protections 
against abusive and discriminatory benefits.
  Moreover, further precedent exists for Congress to grant relief from 
the nondiscrimination rules. In 1986, the Congress established the 
Thrift Savings Fund for Federal employees. As originally enacted, the 
Fund was required to comply with the 401(k) nondiscrimination rules on 
employee contributions and matching contributions to the fund. However, 
in 1987, as part of a Continuing Appropriations Act for 1988, the 
Congress passed a provision that made these nondiscrimination rules 
inapplicable to the Federal Thrift Savings Fund. Thus, Congress has 
reaffirmed the need to treat Governmental pension plans as unique.
  Mr. President, this legislation is not sweeping nor does it grant any 
new treatment to these plans. Because of moratorium, governmental plans 
are currently treated as satisfying the nondiscrimination rules. 
Lifting the moratorium would impose on governmental pension plans the 
costly task of testing for discrimination when no significant abuses or 
concerns exist. In fact, finally imposing these rules may require 
benefits to be reduced for State and local government employees and 
force costly modifications to these retirement plans. This legislation 
coincides with the principle of allowing a State to enjoy the right to 
determine the compensation of its employees.
  Mr. President, with another expiration of the moratorium looming in 
the future, I believe it is time to address this issue. I am under no 
delusion that it will be resolved quickly. The complexities of these 
rules and the uniqueness of governmental plans have brought us to where 
we are today. I believe that as members better understand the history 
of this issue they will agree with us that the appropriate step is to 
end this uncertainty and make the temporary moratorium permanent.

[[Page S9608]]

  Mr. President, I ask unanimous consent that the text of the bill be 
printed following my remarks.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2047

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. MODIFICATIONS TO NONDISCRIMINATION AND MINIMUM 
                   PARTICIPATION RULES WITH RESPECT TO 
                   GOVERNMENTAL PLANS.

       (a) General Nondiscrimination and Participation Rules.--
       (1) Nondiscrimination requirements.--Paragraph (5) of 
     section 401(a) of the Internal Revenue Code of 1986 (relating 
     to qualified pension, profit-sharing, and stock bonus plans) 
     is amended by adding at the end the following new 
     subparagraph:
       ``(F) Governmental plans.--Paragraphs (3) and (4) shall not 
     apply to a governmental plan (within the meaning of section 
     414(d)).''
       (2) Additional participation requirements.--Subparagraph 
     (H) of section 401(a)(26) of such Code is amended to read as 
     follows:
       ``(H) Exception for governmental plans.--This paragraph 
     shall not apply to a governmental plan (within the meaning of 
     section 414(d)).''
       (3) Minimum participation standards.--Paragraph (2) of 
     section 410(c) of such Code is amended to read as follows:
       ``(2) A plan described in paragraph (1) shall be treated as 
     meeting the requirements of this section for purposes of 
     section 401(a), except that in the case of a plan described 
     in subparagraph (B), (C), or (D) of paragraph (1), this 
     paragraph shall only apply if such plan meets the 
     requirements of section 401(a)(3) (as in effect on September 
     1, 1974).''
       (b) Participation Standards for Qualified Cash or Deferred 
     Arrangements.--Paragraph (3) of section 401(k) of the 
     Internal Revenue Code of 1986 is amended by adding at the end 
     the following new subparagraph:
       ``(E)(i) The requirements of subparagraph (A)(i) and (C) 
     shall not apply to a governmental plan (within the meaning of 
     section 414(d)).
       ``(ii) The requirements of subsection (m)(2) (without 
     regard to subsection (a)(4)) shall apply to any matching 
     contribution of a governmental plan (as so defined).''
       (c) Nondiscrimination Rules for Section 403(b) Plans.--
     Paragraph (12) of section 403(b) of the Internal Revenue Code 
     of 1986 is amended by adding at the end the following new 
     subparagraph:
       ``(C) Governmental plans.--For purposes of paragraph 
     (1)(D), the requirements of subparagraph (A)(i) shall not 
     apply to a governmental plan (within the meaning of section 
     414(d)).''
       (d) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to taxable years beginning on or after the date of 
     enactment of this Act.
       (2) Treatment for years beginning before date of 
     enactment.--A governmental plan (within the meaning of 
     section 414(d) of the Internal Revenue Code of 1986) shall be 
     treated as satisfying the requirements of sections 401(a)(3), 
     401(a)(4), 401(a)(26), 401(k), 401(m), 403 (b)(1)(D) and 
     (b)(12), and 410 of such Code for all taxable years beginning 
     before the date of enactment of this Act.
                                 ______
                                 
      By Mr. MOYNIHAN (for himself, Mr. D'Amato, and Mr. Dodd):
  S. 2048. A bill to amend section 552 of title 5, United States Code 
(commonly referred to as the Freedom of Information Act), to provide 
for disclosure of information relating to individuals who committed 
Nazi war crimes, and for other purposes; to the Committee on the 
Judiciary.


                       war crimes disclosure act

  Mr. MOYNIHAN. Mr. President, today I am joined by Senators D'Amato 
and Dodd in introducing the War Crime Disclosure Act. This legislation 
is a companion measure to a bill pending in the House, H.R. 1281, 
sponsored by Representative Maloney.
  The measure is a simple one. It requires the disclosure of 
information under the Freedom of Information Act regarding individuals 
who participated in Nazi war crimes.
  Ideally, such documents would be made available to the public without 
further legislation and without having to go through the slow process 
involved in getting information through the Freedom of Information Act 
[FOIA]. Unfortunately this is not the case. Researchers seeking 
information on Nazi war criminals are denied access to relevant 
materials in the possession of the United States Government, even when 
the disclosure of these documents no longer pose a threat to national 
security--if indeed they ever did.
  With the passing of time it becomes ever more important to document 
Nazi war crimes, lest the enormity of those crimes be lost to history. 
The greater access which this legislation will provide will add clarity 
of this important effort. I applaud those researchers who continue to 
pursue this important work.
  I would also like to call to the attention of my colleagues the 
excellent work of the Office of Special Investigations of the 
Department of Justice. This office has a monumental task and I would 
not wish to add to that burden or divert its officials from their 
primary goal of pursuing Nazi war criminals. To that end, I would note 
that this legislation does not apply to the Office of Special 
Investigations, as it is not identified in paragraph (1)(B) of the bill 
as a ``specified agency.'' I would also add that there is a provision 
in the bill which specifically prohibits the disclosure of information 
which would compromise the work of the Office of Special 
Investigations.
  Mr. President, I would like to thank Representative Maloney for her 
original work on this subject in the House of Representatives. I would 
also thank Senators D'Amato and Dodd for joining me in this effort here 
in the Senate. Finally, I would be remiss if I did not pay special 
tribute to A.M. Rosenthal, whose indefatigable efforts on this subject 
are as admirable as they are effective.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2048

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``War Crimes Disclosure Act''.

     SEC. 2. REQUIREMENT FOR DISCLOSURE UNDER FOIA OF INFORMATION 
                   RELATING TO INDIVIDUALS WHO COMMITTED NAZI WAR 
                   CRIMES.

       (a) In General.--Section 552 of title 5, United States 
     Code, is amended--
       (1) by redesignating subsections (d), (e), and (f) as 
     subsections (e), (f), and (g), respectively; and
       (2) by inserting after subsection (c) the following new 
     subsection:
       ``(d)(1)(A) Notwithstanding subsection (b), this section 
     shall apply to any matter in the possession of a specified 
     agency, that relates to any individual as to whom there 
     exists reasonable grounds to believe that such individual, 
     during the period beginning on March 23, 1933, and ending on 
     May 8, 1945, under the direction of or in association with--
       ``(i) the Nazi Government of Germany,
       ``(ii) any government in any area occupied by the military 
     forces of the Nazi Government of Germany,
       ``(iii) any government established with the assistance or 
     cooperation of the Nazi government of Germany, or
       ``(iv) any government that was an ally of the Nazi 
     government of Germany,

     ordered, incited, assisted or otherwise participated in the 
     persecution of any person because of race, religion, national 
     origin, or political opinion.
       ``(B) For purposes of subparagraph (a), the term `specified 
     agency' means the following entities, any predecessors of 
     such an entity, and any component of such an entity (or of 
     such a predecessor):
       ``(i) The Central Intelligence Agency.
       ``(ii) The Department of Defense.
       ``(iii) The National Security Agency.
       ``(iv) The National Security Council.
       ``(v) The Department of State.
       ``(vi) The Federal Bureau of Investigation.
       ``(vii) The United States Information Agency.
       ``(2)(A) Except as provided in subparagraph (B), Paragraph 
     (1) shall not apply to the disclosure of any matter when 
     there is clear and convincing evidence that such disclosure 
     would--
       ``(i) reasonably be expected to constitute an unwarranted 
     invasion of personal privacy;
       ``(ii) pose a current threat to military defense, 
     intelligence operations, or the conduct of foreign relations 
     of the United States;
       ``(iii) reveal an intelligence agent whose identity 
     currently requires protection;
       ``(iv) compromise an understanding of confidentiality 
     currently requiring protection between an agent of the 
     Government and a cooperating individual or a foreign 
     government;
       ``(v) constitute a substantial risk of physical harm to a 
     living person who provided confidential information to the 
     United States; or
       ``(vi) compromise an enforcement investigation,inquiry, or 
     prosecution by the Office of Special Investigations of the 
     Department of Justice.
       ``(B) Subparagraph (A) shall only apply to records, 
     information, or other relevant matter which is--
       ``(i) properly classified; and
       ``(ii) the protection of which outweighs the public 
     interest in disclosure.
       ``(3) Any reasonably segregable portion of a matter 
     referred to in paragraph (2) shall be provided, after 
     deletion of all portions of the matter that are referred to 
     in such subparagraph, to any person requesting the matter

[[Page S9609]]

     under this section if the reasonably segregable portion of 
     the matter would otherwise be required to be disclosed under 
     this section.
       ``(4) In the case of a request under this section for any 
     matter required to be disclosed under this subsection, if the 
     agency receiving such request is unable to locate the records 
     so requested, such agency shall promptly supply, to the 
     person making such a request, a description of the steps 
     which were taken by such agency to search the indices and 
     other locator systems of the agency to determine whether such 
     records are in the possession or control of the agency.''.
       (b) Inapplicability of National Security Act of 1947 
     Exemption.--Section 701 of the National Security Act of 1947 
     (50 U.S.C. 431) is amended--
       (1) by redesignating subsections (e) and (f) as subsections 
     (f) and (g), respectively; and
       (2) by inserting after subsection (d) the following new 
     subsection:
       ``(e) Subsection (a) shall not apply to any operational 
     file, or any portion of any operational file, described under 
     section 552(d) of title 5, United States Code (Freedom of 
     Information Act).''.

     SEC. 3. EFFECTIVE DATE.

       The amendments made by this Act shall apply to requests 
     made after the expiration of the 180-day period beginning on 
     the date of the enactment of this Act.

                          ____________________