[Congressional Record (Bound Edition), Volume 152 (2006), Part 5]
[Senate]
[Pages 5746-5747]
[From the U.S. Government Publishing Office, www.gpo.gov]




                 CONFERENCE ON THE PENSION REFORM BILL

  Mr. REID. Mr. President. I am concerned with the lack of progress 
being made in conference on reaching a final agreement on the pension 
bill. To this point, little movement has been made to bridge the 
differences between the House and Senate bills.
  This process does not need to be a partisan one. Throughout 
consideration of the pension bill, Democrats have worked with 
Republicans to move forward on pension reform. The Senate, working in a 
bipartisan manner, was able to produce a strong bill that passed by a 
vote of 97 to 2.
  Democrats are eager to participate in the conference negotiations and 
are committed to enacting a strong pension reform bill. It is my hope 
that a conference agreement can be completed in a timely manner so that 
the uncertainty surrounding pensions can be resolved.
  However, House Republicans seem intent on producing a bill without 
including Democrats. That would be unfortunate and is likely to produce 
a bill that fails to meet the principles supported by the Democratic 
caucus.
  The Senate pension bill was crafted with bipartisan participation, 
and that approach produced a bill that received almost unanimous 
support in the Senate. Working together, the conferees can produce a 
conference agreement that would garner an equally strong vote.
  Attached is a set of principles that our caucus has supported 
throughout consideration of this important bill. I believe these 
principles should be the basis for any agreement reported by the 
conference. I ask unanimous consent that it be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
     The conference agreement should include balanced funding 
         rules
       The conference agreement should strike a proper balance 
     between improving pension funding and keeping these plans an 
     attractive benefit option for employers. While there is a 
     trend away from defined benefit pension plans and this trend 
     is likely to continue, rules should not be enacted that 
     exacerbate this problem.
       The key is to establish new rules that impose stronger 
     funding requirements while maintaining incentives for 
     employers to continue these plans. The Administration missed 
     the mark on this. Their focus was primarily on the health of 
     the PBGC and the ramifications for the future of defined 
     benefit pension plans were considered collateral damage.
       Democrats in the Senate share the concern over the PBGC's 
     finances, but they also want help to preserve the traditional 
     defined benefit system.
     The conference agreement should protect older workers while 
         clarifying the status of cash balance plans
       As a type of defined benefit pension plan, cash balance 
     plans contain protections for participants that Democrats 
     support.

[[Page 5747]]

       Cash balance plans are insured by the PBGC. They provide 
     greater portability for workers. And they are more easily 
     understood by participants.
       On the other hand, some companies used conversions to cash 
     balance plans to hide the fact that they were cutting 
     benefits for workers. In some instances older workers saw 
     their future pension accruals frozen for many years as a 
     result of ``wearaway'' provisions of the new plans.
       Recent court decisions on the legality of cash balance 
     plans have created uncertainty for employers who maintain 
     cash balance plans. Congress should clear up this 
     uncertainty, but Senate Democrats will insist that rules be 
     established to protect older workers.
     The conference agreement should include targeted relief for 
         troubled industries
       The airline industry, and more importantly its workers, has 
     faced difficult times the past few years. Those difficulties 
     are likely to continue for some time.
       In recognition of these difficulties, the Senate bill gives 
     the airlines more time before the new stricter funding rules 
     apply. This idea also has strong support in the House where a 
     motion to instruct the House conferees to accept the Senate 
     provision passed by a vote of 265-158.
       The conference agreement must include relief to troubled 
     industries.
     The conference agreement should improve employer-based 
         retirement savings plans
       The Senate bill includes changes to defined contribution 
     plans that address the problems uncovered as a result of the 
     collapse of Enron.
       These changes include getting better and timelier 
     information to plan participants and giving participants 
     greater ability to diversify away from employer stock.
       The Senate bill also includes provisions allowing employers 
     to incorporate automatic enrollment in their plans. The 
     overwhelming evidence suggests that auto enrollment will 
     significantly increase worker participation in DC plans.
       Many 401(k) plan participants are looking for specific 
     advice on how to invest their plan assets. Employers who 
     would like to provide this to their employers are usually 
     advised not to do so because it could subject the employer to 
     liability for investment losses. The Senate bill provides 
     employers relief from this liability so long as the 
     investment advisors are independent.
     The conference agreement should include reform of 
         multiemployer pension plans
       Multiemployer plans are defined benefit plans maintained by 
     two or more employers. One in four pension plan participants 
     are members of multiemployer plans.
       Employers, employer associations, unions and multiemployer 
     plans have worked together on a package of changes to improve 
     multiemployer plan funding.
       The conference agreement must include reforms that give 
     these plans the tools they need to address their funding 
     needs.
     The conference agreement cannot include provisions that 
         undermine patient's rights
       At the 11th hour the House leadership inserted a special 
     interest provision into the pension bill to benefit the 
     insurance industry.
       This provision would put insurance companies ahead of 
     injured patients in any claim against wrongdoers.
     The conference agreement should modernize ERISA without 
         weakening worker protections
       In the 32 years since ERISA was enacted it has served 
     pension plan participants quite well. The Senate bill makes 
     improvements to these rules while retaining important worker 
     protections.
       Conferees should be very cautious about going further than 
     the Senate bill.
       The financial strain facing pension plans makes it even 
     more critical to retain provisions that guard against self 
     dealing and conflicts of interest.
       Recent scandals involving some mutual fund and other 
     financial services providers highlights that these 
     protections are vital to protecting our current and future 
     retirees.
     The conference agreement should be fiscally responsible
       The Senate bill's cost is modest at $12 billion, 
     attributable to the changes made to the funding rules and the 
     cost of the automatic enrollment changes.
       The House loaded up its pension reform bill with nearly $87 
     billion in tax cuts over the next ten years.
       The Savers credit, which helps low- and middle income 
     families save for retirement expires at the end of this year. 
     It certainly should be extended, and is included in the list 
     of expiring provisions that are part of the conference 
     negotiations on the tax reconciliation bill.
       The House also included permanent extension of the higher 
     contribution limits for 401(k) plans and IRAs that were part 
     of the 2001 tax cut bill. These provisions are popular, but 
     they don't expire for another four years. There are many 
     equally popular tax provisions that have already expired and 
     should be considered first. For example, the research credit, 
     the state and local sales tax deduction, the credit for 
     hiring disadvantaged workers, and the deduction for classroom 
     expenses paid by teachers have all already expired. Before we 
     consider provisions that won't expire for another four years, 
     we need to extend these important items.
       The remaining tax cuts in the House bill relate to health 
     care. Health care affordability is an important issue, which 
     deserves to be addressed in its own right on a comprehensive 
     basis, not piecemeal as an afterthought to this pension bill.

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