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United States
Portman/Cardin
pension reform
returns
Representatives Rob Portman and
Ben Cardin have introduced their
Comprehensive Retirement Security
and Pension Reform Act again. Since its
first introduction in 1998, the Bill has
gained widespread bipartisan support
and has become the key retirement
savings Bill in Congress. In 2000, the
House of Representatives approved the
Bill by an overwhelming 401-25 vote.
This time, the Bill had more than
250 co-sponsors when it was
introduced on 14 March. In addition,
more than 100 business, labour and
other groups have expressed support
for the Bill. Representatives Portman
and Cardin hope that this support will
give the Bill the push it needs to finally
become law. It aims to increase
workers' retirement savings, encourage
more employers to establish retirement
plans and ease the administrative
burdens on plan sponsors.
To increase retirement savings, the
Bill would allow employees with
401(k), 403(b) or 457 plans to
contribute more each year. In addition,
employees aged 50 and over could
make 'catch-up' of an additional
US$5,000 a year in contributions.
Employer-matching contributions
would have to be vested more quickly
than under current law. The Bill would
provide portability by making it easier
for employees to transfer their money
if they move between plans. The Bill
also tries to ease some of the
administrative and regulatory burdens
of sponsoring retirement plans.
Although the Bill has strong support,
it has a number of obstacles to
overcome. President Bush has made his
US$1.6 trillion tax bill the focus of his
administration, and it is also a top
priority for Congress and Senate
leaders. Tax bills have been common
vehicles for retirement legislation in the
past, and Portman/Cardin supporters
believe the Bill fits well with the
President's tax package and hope it will
become part of this year's tax bill. It is
likely, however, that it will be several
months, possibly even longer, before
the legislation can become law.
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The news contained in the
Newsbriefs section of The
Multinational is drawn from the News and Issues section of the Watson Wyatt website.
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