Pension Reform Legislation Should Address Important DC Plan Issues
WASHINGTON, DC, October 31, 2005 -- The American Benefits Council is urging the House of Representatives Ways and Means Committee to support important defined contribution plan reforms when it considers the Pension Protection Act (H.R. 2830). “Much attention has been given to the uncertainties surrounding defined benefit pensions, with good reason,” said Council President James Klein. “However, if Congress’s goal is to enact truly meaningful and comprehensive reform of the nation’s retirement system, legislation must also encourage participation in defined contribution plans.” Defined contribution plans include 401k, 403(b), 457 plans and others.
In an October 26 letter, Klein thanked Committee Chairman Bill Thomas (R-CA) for his commitment to the employer-sponsored retirement system and reiterated the business community’s continued support for defined contribution plan provisions, including those that would:
- Make permanent the pension and retirement savings provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), which are scheduled to sunset at the conclusion of 2010, as well as the Savers Credit now scheduled to expire in 2006;
- Promote automatic anrollment arrangements in which individuals automatically participate in their employer’s 401k plan unless they opt out and/or automatically increase employee contribution levels each year unless the employee opts out; and
- Allow employees to save for retirement planning services on a pre-tax basis through payroll deduction.
"Reform of the pension funding rules and clarification of the legal status of hybrid plans is certainly crucial. It is also essential that Congress recognize the central role that defined contribution plans play in ensuring retirement income security," Klein said.
The Council's letter to Thomas is available on the Council Web site or by pasting the following address into your Web browser: http://www.americanbenefitscouncil.org/documents/abd_dc_recommendations_bthomas.pdf
Interviews with Klein or Jan Jacobson, Council director, retirement policy, can be arranged by contacting Deanna Johnson, APR, Council director, communications, or Jason Hammersla, Council manager, communications & publications. Both can be reached by phone at (202) 289-6700.
About The American Benefits Council
The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council’s members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.
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