[Congressional Record Volume 143, Number 76 (Thursday, June 5, 1997)]
[Extensions of Remarks]
[Page E1123]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

[[Page E1123]]

H.R. 1795, RESCIND DOLLAR LIMITATION ON POLICE AND FIREFIGHTER BENEFIT 
                                 PLANS

                                 ______
                                 

                        HON. BENJAMIN A. GILMAN

                              of new york

                    in the house of representatives

                         Thursday, June 5, 1997

  Mr. GILMAN. Mr. Speaker, I rise today to introduce H.R. 1795, 
legislation to amend the Internal Revenue Code of 1986 to remove the 
dollar limitation on payment of benefits from a defined benefit plan 
maintained by a State or local government for the benefit of employees 
of the police department or fire department.
  I am introducing this bill in an attempt to be fair to our local and 
State fire and police officials--those who day in and day out place 
their lives on the line for our protection.
  As my colleagues may know, police officers and firefighters 
throughout most of the country are eligible to retire under certain 
defined benefit plans which generally allow for retirement after a 
fixed number of years of service. Typically, such services entails 20 
or 25 years, regardless of age. Retirement benefits generally are based 
on a percentage of the retiring officer's highest 3-year salary 
average, and start at about 50 percent of that average. The average in 
most instances increases with additional years of service but usually 
does not exceed 65 to 75 percent.
  Accordingly, many officers, living along the east coast or in large 
metropolitan and surrounding suburban areas throughout the country, are 
forced to work past their general retirement age in order to afford the 
high cost of living in these areas.
  If we are going to continue to expect these men and women to protect 
our neighborhoods, we should at least allow them the opportunity to 
collect the money they have paid into their own pension. After all, 
under the Tax Code we allow those participants in private pension funds 
to collect the money they have paid, once vested. Why then don't we 
allow those who risk their lives and protect our streets on our behalf 
to collect the money they have both paid and earned?
  H.R. 1795, does not provide any loss in Federal tax revenue dollars 
and, in fact, will increase revenue. Under current practice the moneys 
paid into these municipal pension funds are not required to be 
accounted for by the IRS unless collected by the retiree. Should we 
repeal these special provisions, under section 415, tax revenue would 
now be collected on the funds dispensed to retired police officers and 
firefighters.
  H.R. 1795 is an issue of fairness.
  I urge all of my colleagues to cosponsor this legislation and support 
our police and fire officials' efforts to collect their full pension 
benefits upon retirement.

                               H.R. 1795

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

     SECTION 1. REMOVAL OF DOLLAR LIMITATION ON BENEFIT PAYMENTS 
                   FROM A DEFINED BENEFIT PLAN MAINTAINED FOR 
                   CERTAIN POLICE AND FIRE EMPLOYEES.

       (a) In General.--Subparagraph (G) of section 415(b)(2) of 
     the Internal Revenue Code of 1986 is amended by striking 
     ``participant--'' and all that follows and inserting 
     ``participant, subparagraphs (C) and (D) of this paragraph 
     and subparagraph (B) of paragraph (1) shall not apply.''
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to years beginning after December 31, 1996.

     

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